Analysis: Will BTC return to a bear market as soon as interest rate hikes begin? The current chip structure is similar to that in 2023, making it difficult to repeat the decline of the previous rate hike cycle.

BlockBeats news, September 18: Analyst Murphy published an article interpreting "Will BTC return to a bear market as the Federal Reserve begins raising interest rates?" He stated that the Federal Reserve raised interest rates by 425 basis points in 2022, including four consecutive 75 basis point hikes from June to November, and Bitcoin fell from $41,000 at the time of the first rate hike to $15,800, dropping 65% for the year; in 2023, there were four 25 basis point hikes, with July being the last, and BTC rose from $16,500 to $42,000 for the year; from December 2015 to December 2017, there were five rate hikes over two years, each by 25 basis points, and BTC rose from $454 to $16,515.

From the cases listed above, rate hikes themselves do not explain much; what truly matters should be the two variables of "the pace of tightening" and "BTC's own position." The reason 2023 was able to rise is that the marginal direction was turning looser. Inflation fell, and the size of individual rate hikes dropped from 75 to 25; the market was trading on "rate hikes about to end." At the same time, BTC had just completed a thorough round of major turnover, its chip structure was reset, and the coin price was in a low-valuation zone.

BTC's current own position is extremely similar to that in 2023. The so-called own position, of course, does not refer to the absolute price, but should refer to the chip structure. From the PSIP data, as in early 2023, it has just experienced a round of extreme stress testing from 100% to below 50%. With 6 months at the bottom, multiple panic capitulations, and sufficient turnover. Therefore, the relative position in terms of chip structure is certainly not the same as at the time of the first rate hike in March 2022.

Then the only remaining variable is the subsequent pace of rate hikes, including the number and magnitude. If each hike is 25 basis points, and there is no expectation of re-entering a rate hike cycle, the analyst personally believes BTC will not "return to a bear market," but at most will only delay "the pace of the cycle." But this is not necessarily a bad thing. Sometimes slow is fast.