A major pullback after the rate cut—Is the crypto bull market over?

On September 24, just a week after the Federal Reserve's first rate cut in 2025, Chairman Powell spoke publicly again, delivering a complex and subtle signal. He warned that the U.S. labor market is showing signs of weakness, the economic outlook is under pressure, and inflation remains above 2%. This "two-way risk" leaves policymakers in a dilemma, and he stated, "There is no risk-free path."

Powell also commented that stock market valuations are quite high, but emphasized that this is not currently a period of rising financial risk. Regarding the October rate-setting meeting, Powell said there is no preset policy path. The market interpreted this speech as "dovish": after the speech, the probability of a rate cut in October rose from 89.8% to 91.9%, and the market has basically bet on three rate cuts this year.

Driven by expectations of easing, U.S. stocks have repeatedly hit new highs, while the crypto market presents a completely different picture. On September 22, the crypto market saw liquidations totaling as much as $1.7 billion in a single day, marking the largest liquidation since December 2024. Next, BlockBeats has compiled traders' views on the upcoming market situation to provide some directional reference for your trading this week.

@0xENAS

Trader Dove believes that various signs indicate the crypto market is gradually weakening.

When I re-entered the market after a two-week break, I happened to catch the largest liquidation correction of the year. As a result, those "liquidation buy orders" that historically have led to rebounds 80% of the time continued to fall this time—this dislocation is a very clear danger signal. The 20% failure scenario often means there are no longer enough marginal buyers in the market, and no one is willing to take the baton for a rebound.

I suspect that we will increasingly decouple from the linkage logic of U.S. stocks and other "risk assets," and begin to lose several key support levels. My observation points are: BTC breaking the $100,000 structure, ETH falling below $3,400, and SOL falling below $160.

@MetricsVentures

We believe that the global asset bubble cycle has most likely entered the incubation phase, and the start seems to be just a matter of time. This bubble cycle is occurring against the backdrop of unemployment and social division caused by AI disruption, supported by global fiscal-led economic cycles and political-economic ecology, and accelerated by the two major powers' shared desire to export inflation to resolve internal contradictions as the world becomes increasingly polarized. It is expected to enter the public discussion in the coming months.

Looking ahead, in addition to the digital currency market, which has seen no major fluctuations for nearly a year and is a potential big winner, global cyclical minerals and the AI derivative investment chain will continue to generate excess returns. In terms of crypto stocks, the success of ETH crypto stocks will lead to a series of copycats, and the combination of strong large-cap coins and strong stocks is expected to become the most eye-catching segment in the coming months.

As countries with competitive advantages begin to consider setting up investment accounts for newborns, further relaxing pension investment restrictions, and elevating capital markets that have historically served as financing channels to new heights, the bubble of financial assets has become a high-probability event.

We are also pleased to see the U.S. dollar market beginning to welcome the native volatility of digital currencies and providing ample liquidity pricing for it, which was unimaginable two years ago, just as the success of MSTR was a financial magic we could not have predicted two years ago.

In short, we are clearly optimistic about the digital currency market for the next 6 months, the global mineral and pro-cyclical markets for the next 1-2 years, and the AI derivative industry chain. At this moment, economic data is no longer so important, just as many in the crypto circle joke that "economic data is always good news." In the face of the roaring train of history, embracing the bubble in line with the trend may have become the most important lesson for our generation.

@Murphychen888

According to the "three-line convergence" trend, after October 30 this year, mvrv will enter a long-term oscillating downward trend, which is fully aligned with BTC's historical 4-year cycle timing pattern.

However, according to this macro expectation data, the overall signal conveyed is "soft landing + inflation decline + gradual monetary policy easing."

Although the future is always unknown, if this is the case, then the 4-year cycle theory may really be broken, and bitcoin may enter an "eternal bull market."

@qinbafrank

The logic behind U.S. stocks outperforming crypto in large-scale wide fluctuations is that the market as a whole is still vaguely worried about the future trend of inflation. U.S. stocks are strong because their fundamentals are strong and AI is accelerating, allowing U.S. stocks to withstand concerns about inflation and continue to surge. The problem with crypto is that it relies on capital and expectations, and macro concerns affect the inflow of external funds.

Currently, the deep structure of the crypto market is that traditional funds entering through ETFs and listed company purchases act as buyers, while ancient whales and trend investors taking profits act as sellers. Most of the market's price fluctuations and volatility come from the game between these two forces. In the short term, economic strength, inflation trends, and interest rate expectations will all affect the speed of buyer capital inflows. Good expectations accelerate inflows, poor expectations stop inflows or even cause outflows.

Now that the Fed has returned to rate cuts, but inflation is still slowly rising, the market naturally worries that future Fed rate cuts may be interrupted again by inflation. In this case, buyer capital inflows will be affected, as can be seen from changes in ETF net inflows. Meanwhile, the core theme of U.S. stocks—AI penetration rate—is about to reach 10% (UTC+8). Once it surpasses this, it will enter a golden period of rapid penetration, as has always been said, AI is accelerating its own acceleration. From this perspective, the strength and weakness are naturally reflected.

The future market trend needs to refer to macroeconomic data:

1) Best case: The pace and magnitude of inflation rise are lower than expected, which is positive for both crypto and U.S. stocks.

2) Moderate case: The pace of inflation matches expectations, which is more positive for U.S. stocks because their fundamentals are stronger. Crypto will be relatively good but likely in a large-scale wide fluctuation.

3) Worst case: If there is a significant inflation overshoot in the future, both U.S. stocks and crypto will correct. U.S. stocks may see a small correction, while crypto may see a medium correction.

@WeissCrypto

The liquidity impact of the Fed's rate cuts will not be injected into the crypto market until mid-December (UTC+8). Their model shows that sideways fluctuations may last 30 to 60 days, with a significant bottom possibly appearing on October 17 (UTC+8). Notably, Weiss Crypto recently predicted a peak around September 20 (UTC+8).

@joao_wedson

Joao Wedson, founder of blockchain analytics platform Alphractal, said that bitcoin is showing clear signs of cyclical exhaustion. He pointed out that the SOPR trend signal, which tracks on-chain realized profitability, indicates that investors are buying at historical highs while profit margins are shrinking. The actual price for short-term bitcoin holders is currently $111,400, and institutional investors should have reached this level earlier. He also noted that compared to 2024, bitcoin's Sharpe ratio, used to measure risk-reward, has weakened.

He suggested, "Those who bought BTC at the end of 2022 are satisfied with +600% returns, but those accumulating in 2025 should reconsider their strategy," and that market makers tend to sell BTC and buy altcoins, which are expected to perform better in the future.