After Federal Reserve officials recently signaled a rate cut, the crypto market experienced fluctuations, with Bitcoin rising over 3%. Many investors began sharing profit screenshots. However, it’s important to note that this opportunity is not accessible to everyone. Improper operations can not only prevent you from making money but may also lead to losing your principal. Today, I want to share some practical logic for investing in the crypto market, from market judgment to specific deployment strategies—useful insights that can be directly applied.

**The Truth About Rate Cut Transmission: It’s Not a Direct Benefit**

Many people misunderstand a key point—the impact of rate cuts on the crypto market is an indirect transmission, not a direct positive. After a rate cut is implemented, funds do not flow directly into the crypto space. The actual flow sequence is: funds first move from banks and bond markets into stocks, funds, and other risk assets. When the returns in these markets are pushed to a certain level, some capital seeking higher yields will then enter the crypto sector. This means that the crypto market often lags behind traditional financial markets by half a beat; entering too early can easily lead to "shakeouts."

**Two Reliable Indicators for Market Strength**

Instead of obsessing over candlestick charts, focus on these two indicators:

First, the US Dollar Index (DXY). The US Dollar Index is generally negatively correlated with the crypto market. If rate cut expectations heat up, and the US Dollar Index continues to decline, it indicates capital is flowing out externally, providing a foundation for sustained crypto price increases. Conversely, if the US Dollar Index only experiences a brief correction and quickly rebounds, the rise in crypto assets is likely a "false rally" and not worth following.

Second, observe the sequence of capital flows. Pay attention to the performance of traditional financial markets—especially high-yield bonds and emerging market assets—as these often serve as "signal lights" before funds enter the crypto market. When momentum in these markets wanes, capital will seek the next target.

Mastering these two points is much more reliable than simply looking at market reports.