Federal Reserve Likely to Cut Rates; Bitcoin Eyes Rally

The Federal Reserve is predicted to cut interest rates by 0.25% this week, a move anticipated to create volatility in Bitcoin and altcoin markets.

Investors expect short-term market turbulence but see long-term Bitcoin growth potential if dovish guidance accompanies the rate cut.

Fed’s Anticipated 0.25% Rate Cut and Market Effects

The Federal Reserve is widely anticipated to implement a 0.25% rate cut, a move supported by analysis tools like CME’s FedWatch. Market expectations solidify around a dovish stance this week.

Chair Jerome Powell’s recent remarks emphasize inflation control as a primary motivator for the rate adjustment. Institutional players are closely monitoring Bitcoin’s response to liquidity changes.

Immediate Volatility in Crypto Markets Expected

Market analysts predict immediate volatility for cryptocurrencies, with Bitcoin’s spot price consolidation around key levels. Altcoins face sharper risks with up to 20% dips forecasted.

Financial shifts include potential sell-offs in altcoins post-announcement, and institutional investors like those in spot Bitcoin ETFs could see increased activity with a sustained rate cut environment.

Bitcoin Rallies Tied to Past Rate Cuts

Past rate cuts yielded notable Bitcoin rallies, as observed in 2019–2020. Altcoins, however, faced higher volatility during similar events, emphasizing market sensitivity to interest rate cycles.

Experts suggest that medium-term bullish potential for Bitcoin hinges on future Fed guidance. “The historical patterns show that Fed rate cuts generally unlock liquidity, leading to medium-term rallies in BTC.” — Raoul Pal, CEO, Real Vision.