What happens when the Fed's policy shift coincides with exchange data fluctuations? Recently, Bitcoin experienced a 24-hour net outflow of 700 coins from exchanges, while expectations of a Fed rate cut are heating up. This combination is worth paying attention to.

Interestingly, this isn't the first time such a situation has occurred in history. In March 2020, the same dual signals appeared—at that time, the Federal Reserve initiated a rate cut cycle, and Bitcoin holdings on exchanges continued to decline. What happened next is well known: Bitcoin soared from $3,800 to $64,800, a 16-fold increase. That rally lasted throughout 2020 and became known as a "bull market" by many.

Why does a rate cut trigger a surge in crypto assets? The logic is actually simple. A rate cut means increased dollar liquidity, and yields on traditional financial assets (bonds, bank deposits) decline. Large amounts of capital will inevitably seek new outlets. At this point, Bitcoin, with its fixed supply—never exceeding 21 million coins—comes into view. It has no inflation, making it inherently deflationary. Against the backdrop of dollar depreciation, Bitcoin becomes a store of value.

Historical data shows that during the Fed's rate cut cycle in 2019, Bitcoin's price increased by about 300%; in 2020, with additional rate cuts, the increase exceeded 500%. This is not coincidence but the result of the interaction between policy environment and asset properties.

What about exchange net outflows? This reflects another dimension—the behavior change of holders. When large holders withdraw coins from exchanges, it often indicates increased confidence in the market and a preference for long-term holding rather than short-term trading. A net outflow of 700 coins may seem small, but in the context of the entire market, it still represents a certain attitude.

When these two signals combine, the market tends to enter an accelerated upward phase. Expectations of Fed policy push asset prices higher, while reduced exchange liquidity reinforces scarcity expectations—forming a positive feedback loop.

Of course, history won't repeat exactly. The environment in 2020 was different from today, with more market participants and different volatility. But the mechanisms of policy and fundamentals are similar. For market participants, this period is indeed worth paying close attention to, observing whether Bitcoin's price will follow a historical path.