Author: hoeem
Translated by: Azuma, Odaily
Editor's Note: With BTC reaching a new historical high and ETH strongly breaking through the $3,000 mark, the market shows signs of accelerating upward. Analyzing the market's reasons for the rise always revolves around the topic of interest rate cuts. Early this morning, two Federal Reserve officials again gave positive signals about interest rate cut expectations.
- San Francisco Fed President Daley stated last night: "I think there might be two rate cuts, but everyone's expectations have uncertainty, considering a rate cut in the fall."
- Federal Reserve Board member and potential next chair candidate Waller said that even with strong June employment data, the Federal Reserve should still consider a rate cut at the July monetary policy meeting - "I have made my point clear. The current policy interest rate level is too high, and we can discuss lowering the benchmark rate in July... When inflation is declining, we do not need to maintain such a tight policy stance, which is the decision-making logic a central bank should have."
However, what exactly does a rate cut mean for the cryptocurrency market? What other measures have effects similar to rate cuts? What stage of the liquidity cycle are we currently in? What signals can be observed for future changes? Many market participants lack a clear understanding of these fundamental yet crucial questions. In the following article, cryptocurrency trader hoeem, who has long focused on the macroeconomic environment, provides his own answers to these questions.
The following is the content of hoeem's article.
What Stage of the Liquidity Cycle Are We In?
Generational wealth is often created during the transition from tightening to easing. Accurately grasping the position of the liquidity cycle is crucial for investment layout - so what stage are we currently in? Let me tell you the answer.
Even if you dislike macroeconomic analysis, you should pay attention to changes in the liquidity cycle because central bank liquidity is the lubricant of the global economic engine. Add too much, and the market will overheat; pull too hard, and the piston will seize up, and your beautiful life will soon slip away. If you can precisely track the flow of liquidity, you can layout bubbles and crashes in advance.
[The translation continues in the same manner for the rest of the text, maintaining the original structure and translating all text while preserving HTML tags and specific terms as instructed.]
