The highly anticipated US non-farm payroll report shows that as the world's largest economy, the United States added 0.142 million non-farm jobs in August, slightly lower than analysts' expectations, and the unemployment rate dropped from 4.3% in July to 4.2%.

Shortly after, Christopher Waller, a director of the Federal Reserve, stated during a speech at the University of Notre Dame that the "time has come" to lower interest rates and he will advocate for "preemptive rate cuts" in appropriate circumstances.

The market is beginning to speculate that the Federal Reserve may implement "preventive rate cuts" and adopt a more aggressive rate-cutting policy before the economic recession actually arrives.

As a result, the expectation of a 50 basis point rate cut has exceeded the market's general forecast of a 25 basis point rate cut, which is not good news for risk assets such as cryptos and US stocks.

Historic drop in September.

According to an analysis survey, the 7% decline in Bitcoin in September is consistent with the trend of continuous market declines in previous years. In September 2022, Bitcoin fell by 7%, similar single-digit declines occurred in 2021, 2020, and 2018.

This indicates that September is often a month of bearish sentiment, and the current decline is no exception. However, in extreme cases such as in 2014, Bitcoin has also experienced more severe declines, such as a 19% drop during a bear market.

Although there is currently a downturn, 2024 is a halving year, which means that the downward pressure may not be as severe as in non-halving years.

Impact of halving years

In addition, the survey also found that in halving years such as 2016 and 2020, the possibility of a significant decline is smaller. In recent years, the volatility of Bitcoin has been relatively small. A 7% decline seems more likely, which could cause Bitcoin to fall to around $55,000.

Even in more extreme cases, such as a 13% or 19% drop, bitcoin could still fall to $48,000 or lower. However, unless unexpected economic events trigger sell-offs, such sharp declines are not common during halving years.

Optimistic outlook for October

Although September has historically performed poorly, October is usually one of the best months for bitcoin. Historically, bitcoin has seen significant gains in October, with an average return rate exceeding 20%. In 2020, just like in 2024, a halving year, bitcoin soared 27% in October, giving hope that the current downward trend may soon come to an end.

Based on historical patterns, October may see a 10% to 30% increase, consistent with previous halving years when bitcoin entered a new bull market. This suggests that while September may see consolidation, October still has the potential for a strong recovery.

What will happen next in the market?

It is expected that there will be an interest rate cut on the 19th, which is still 10 days away. Many people can no longer hold on, and I see that many people have already lost all their funds. I advise those with limited funds to stop speculating, especially those without a source of funds. Do not borrow money, it is a bottomless pit.

Recently, another super whale has emerged, trading 500 bitcoins each time starting from August 26th. As of September 7th, they have already bought 12,500 bitcoins, at an average price of approximately 58,000 USD, amounting to 0.725 billion USD. The big players are still buying at the dip, and the data I have been monitoring shows that the positions of the big players are all inflowing, while ETFs and retail investors' chips are continuously outflowing. It is highly likely that before the rate cut, a shot will be taken towards the bottom range of 48,000 points. The overall market situation is still in a weak period of consolidation.

The trend this year is basically a replication of last year, with both peaking in March and then falling all the way without taking a breath. It has been falling for 4 out of 5 days a week, dropping a few points every day for several months. Last year, it took 6 months for a rebound after a fall, and this year, it has also been falling for 6 months. The rate cut in September is theoretically positive news, but the capital markets usually respond to positive news by falling. The current decline in the U.S. stock market is actually a reflection of the anticipated rate cut, leading to a decline and a correction.

From a personal perspective, I used to think that the small-scale adjustments in the U.S. stock market (within 10-15% in my system) have not yet reached the appropriate extent. The Nasdaq may experience a larger degree of adjustment than the S&P 500.

Moreover, even if we consider the adjustment period before and after the initial rate cut during the weak landing period in 2019 and 1995 (a little over two months in 2019 and a little over three months in 1995), the current adjustment in the U.S. stock market has only been one and a half months since the high point in mid-July.

Not to mention, the current situation in this year's election is very tense, and it is reasonable for capital to stay away until there is more clarity.

Until the final adjustment is in place, there will likely be a lot of back and forth, after all, market expectations of a recession cannot be confirmed at the moment, and it is normal for such expectations to be dispelled later on.

The adjustment after the rate cut is also likely to be influenced by the trend of the election.