Recently, expectations for a rate cut by the Federal Reserve in the financial markets have significantly intensified. Data from the Chicago Mercantile Exchange ( CME ) indicates that the probability of a 25 basis point cut in September has reached 83.5%, while the probability of a 75 basis point cut in December has surged from last week's 20.2% to 51.1%. This change reflects the market's strong anticipation for the Federal Reserve to adopt a more accommodative monetary policy before the end of the year.

Generally speaking, the trend of loose monetary policy tends to create a favorable environment for risk assets, including cryptocurrencies. In this context, the price movement of Bitcoin is worth paying attention to.

If the expectation of interest rate cuts materializes, the increase in market liquidity may push Bitcoin to break through the key resistance level of $120,000, and even reach a range of $130,000 to $150,000. This target is not without basis: a loose monetary environment often elevates the valuation center of risk assets, combined with the strong upward trend exhibited by Bitcoin itself, making this price target somewhat reasonable.

However, investors also need to be cautious of the potential 'fake drop' market conditions that may arise in the short term. The current pullback is likely a short-term reaction from the market to the tightening liquidity expectations. In this situation, it is particularly important to closely monitor for signs of a bottoming out, such as the stabilization of key support levels or rebounds accompanied by increased trading volume. These signals may indicate the emergence of a buying opportunity at the bottom, and investors should remain vigilant to avoid missing out on potential low-price buying opportunities amid market panic.

Overall, although Bitcoin prices may face fluctuations in the short term, if the Federal Reserve's monetary policy shifts towards easing, Bitcoin prices are expected to see significant increases by the end of the year. Investors need to find a balance between risk and opportunity, remaining optimistic about potential gains while also preparing for possible short-term volatility.