QCP Capital: The market will face continued selling pressure in the coming days, and the Federal Reserve is not expected to urgently cut interest rates in September

QCP Capital, a Singapore-based crypto investment institution, posted that Monday's market turmoil may seem like a nightmare for many as assets have mostly recovered from the massive sell-off. The VIX index traded more than 65%. Traditional financial marekt is finally experiencing the day-to-day volatility of the cryptocurrency market. While the initial shock may have passed, we foresee continued selling pressure in the market over the next few days as systemic funds continue to reduce their exposure amid heightened volatility. We recommend keeping a close watch on the Nasdaq, Nikkei, and USD/JPY rates as cross-asset correlations remain high in the short term.
We don't think the Fed will make an emergency rate cut in September, nor will it cut rates on the sidelines of the October meeting, as this will exacerbate market panic. As the sharp phase of market volatility comes to an end, we tend to build long-term long positions in anticipation of the rate cut cycle. Given the higher volatility, we prefer to choose trades with a 3-6 month timeframe to avoid being affected by market volatility.