Analysis: Attention should be paid to the negative impact of the Federal Reserve's interest rate cuts on the cryptocurrency market against the backdrop of economic weakness

ChainCatcher news, CoinDesk cites a report by 10x Research founder Markus Thielen stating, "If the Federal Reserve cuts interest rates in September 2024 merely due to inflation concerns, it could be a short-term positive for Bitcoin. However, if concerns about economic growth lead to a rate cut, whether in September or later, Bitcoin may face significant selling pressure."

Additionally, strategists at Wells Fargo Investment Institute indicate that the onset of a Federal Reserve rate-cutting cycle often coincides with a sharp decline in the stock market. Since 1974, the stock market has averaged a decline of about 20% within 250 days following the Fed's first rate cut. This means cryptocurrency traders should be vigilant for signs of a weakening U.S. economy.