"Interest Rate Cut Night Preview: What History Tells Us and How the Crypto World Responds?"

At 2 a.m. Beijing time on Thursday, the Federal Reserve is set to announce its interest rate decision. A 25 basis point rate cut is almost a foregone conclusion, but the real focus of the market will be on Powell's comments regarding future policies—how many more rate cuts will there be this year?
Unlike in the past, this round of interest rate cuts is initiated in a complex environment of high asset valuations, no economic recession, and inflation not fully receding. Historical experience shows that interest rate cuts themselves do not guarantee a bull market; the health of the economy is the core issue.
Reviewing the past four rounds of interest rate cuts:
After the interest rate cut due to the pandemic in 2020, assets surged because the economy was at rock bottom and liquidity was being injected crazily.
The interest rate cut in 2007 failed to prevent the outbreak of the subprime mortgage crisis, and the bubble eventually burst.
The interest rate cut in 2001 came too late, leading to the collapse of technology stock valuations;
In 1995, a healthy economy and defensive interest rate cuts led to a bull market.
Although there are no signs of recession in the current economy, the prices of assets such as U.S. stocks and Bitcoin have already factored in excessive expectations for interest rate cuts, and the risk of "good news turning into bad news" cannot be ignored. We especially need to be vigilant about the possibility of a second inflation and stagflation.
For the crypto world, the fact that Bitcoin has not followed the rise of the US stock market recently indicates a temporary slowdown in capital momentum. Altcoins have experienced a wave of speculation, with most retail investors chasing targets that have scattered chips and substantial selling pressure. Those projects that can continue to perform will still be those with ecological progress and undervaluation advantages.
On strategy:
Do not chase high hotspots, especially coins that have risen too much and whose community enthusiasm has declined.
Pay attention to potential tracks after liquidity improvement, such as RWA, chain abstraction, DePin, etc.;
Maintain a certain cash position to guard against market correction risks.
The opening of an interest rate cut cycle does not mean a smooth path ahead. One must view it rationally and lay out strategies cautiously in order to preserve returns and navigate through the cycle.