With the interest rate cut expected to be postponed to September, will June become a 'kill first, then respect' market?

Content Editor: Yao Erliu

Content Compilation: Yao Erliu

zkSync Due to community dissatisfaction caused by the project party's hoarding of a large number of "rat warehouses", the launch time was postponed. The zkSync witch lost almost 60% of the user addresses, causing widespread abuse in the community. zkSync will decide to postpone the launch. This incident may put greater pressure on ZK's launch. The incident of the project team creating numerous addresses to build rat warehouses is a double-edged sword. The question of selling or not selling has become an important issue for zkSync traders.

If you sell, the selling pressure on the market will be huge. Since the rat positions are too concentrated, the airdrops do not constitute scattered addresses, so the expectation of selling pressure is amplified, resulting in After going online, traders on the market became more panicked about trading.

If you do not sell, it will be controlled by the project party, which will lead to the independent will of the actual controllers of many addresses. Once a larger amount of chips is controlled and prevented from flowing into the market, the trading volume will shrink. When liquidity is low, there will be a steady rise, but high prices will still cause panic among traders.

What is the terminal interest rate?

Terminal Rate refers to the highest (or lowest) level that interest rates are expected to reach during a cycle of interest rate hikes or rate cuts by the Federal Reserve. This interest rate level signals that the Fed believes it has reached a monetary policy stance appropriate to economic conditions and signals the end of a cycle of raising or lowering interest rates.

The determination of the terminal interest rate is based on the Federal Reserve’s comprehensive assessment of the economic situation, including the following key factors:

• Inflation: One of the Federal Reserve’s main goals is to maintain price stability, that is, Maintain an inflation rate of around 2%. If the inflation rate is too high, the Fed may raise interest rates to a certain terminal rate to curb inflation; conversely, if the inflation rate is too low, the terminal interest rate may be lower.
• Economic growth: The level of economic growth also affects the setting of terminal interest rates. Strong economic growth may require higher interest rates to prevent the economy from overheating, while weak economic growth may require lower interest rates to stimulate economic activity.
• Employment Situation: The Fed is also paying attention to the job market. High employment and low unemployment are often associated with higher interest rates, while high unemployment may require lower interest rates to support employment.
• Global economic environment: Global economic uncertainty and the monetary policies of other major economies will also affect the Federal Reserve's terminal interest rate decision.

The reason for this market decline is also mainly due to several positive data, which caused the market to temporarily gap in anticipation of the Federal Reserve's interest rate cut.

Since Powell revealed in his last press conference that "interest rates will be considered when the unemployment rate reaches 4%," in fact, it has not exceeded 4% for nearly a year, and the most recent data is 4% and does not exceed 4%. It is not as high as expected, and the Federal Reserve has not focused on cutting interest rates in the current environment.

In addition, the Democratic Party has also expressed the hope that it can urge the Federal Reserve to cut interest rates as soon as possible. This news also revealed that in the short term, the Federal Reserve's attitude towards cutting interest rates is not high.

When will interest rates be cut?

Currently, all players in the industry are paying attention to the Federal Reserve's interest rate cut. Cutting interest rates means that economic development is moving in a good direction.

After last week’s data was released, market speculation about interest rate cuts suddenly stopped, because the data was all in a stable state, and there was no major adjustment or optimism.

Then we will pay more attention to when the interest rate will be cut.

The terminal interest rate currently displays data on September 18. As of now, the probability of a 25 basis point interest rate cut is 48.3%, which is higher than the 525- The probability of 550 is currently the most important turning point.

So regarding the issue of interest rate cuts, I think the probability of an interest rate cut in September is the highest.

Will June be a "bloody battle"?

First of all, the market fluctuations in June may be very large. The bullish sentiment in the options market, the main force in the futures market, is very high. The biggest pain point of the current option positions is on the 628th exercise day. for $55,000.

The notional amount of option positions on June 28 was US$6.564 billion, and the number of call options was 65,800, worth US$4.454 billion.

accounts for 67% of the total nominal amount, indicating that the market's view on late June is strongly bullish. Although the data may have some hawkish views and remarks, the current capital market is optimistic.

And the transaction in June will definitely be very "bloody". The data at 2 a.m. today is not bearish. The data is positive. At the same time, because today is the 613 delivery day, the price of BTC rose from a minimum of $66,051 to $69,999, an increase of up to 6%. It then fell back from $69,999 to $67,500.

The weather is too hot now, everyone should pay more attention to rest. Finally, the market in June will be more volatile, which is a good opportunity for friends who like to play short-term trading.

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