Many cryptocurrency market analysts believe it is only a matter of time before the U.S. Federal Reserve (Fed) takes the step that many major economies like Europe and China have chosen – cutting interest rates.

This move is seen as the key to unlocking the next strong growth phase of the cryptocurrency market, especially after the Fed just decided to keep the benchmark interest rate at 4.25% – 4.50% this week.

Analyst: Lower Interest Rates Will Be the Signal to Start the Bull Run

According to cryptocurrency analyst @rovercrc on social media X, Bitcoin and altcoins may continue to move sideways or experience slight corrections until the Fed changes its policy.

He believes that a rate cut will be a key signal to trigger a strong growth wave, potentially bringing digital asset prices to new highs. Currently, the market's 'sideways' phase is seen as an accumulation phase before the storm – waiting for a policy boost from the Fed.

Fed Holds Interest Rates Steady, Warns of 'Tariff Inflation'

The decision to maintain interest rates this time marks the fifth consecutive time the Fed has kept interest rates unchanged. This occurs despite pressure from President Donald Trump, who has repeatedly called for rate cuts to support U.S. economic growth.

Fed Chairman Jerome Powell emphasized that the board remains cautious, especially in the context of the U.S. economy facing uncertainty from the new administration's tariff policy. Powell referred to this as the beginning phase of 'tariff inflation,' while asserting that all future interest rate decisions will depend entirely on upcoming economic data.

Why Do Rate Cuts Usually Have a Positive Impact on Crypto?

History shows that interest rate cuts often reduce the attractiveness of fixed-income investments like bonds, leading to a trend of capital flowing into higher-yielding risk assets.

Bitcoin and cryptocurrencies are always among the preferred asset classes when investors seek superior profit opportunities.

Additionally, over the past year, the crypto market has become more attractive with the emergence of Bitcoin ETF funds, paving the way for substantial capital inflows from institutional investors. This means that any monetary easing policy from the Fed could significantly boost capital flows into the market.

Rate Cuts: The Consensus Point of the Global Economy

If the Fed cuts interest rates, this move would align with the trends of other major economies such as Europe and China.

This global consensus could create a wave of large-scale capital movement from traditional assets to Bitcoin and altcoins, creating a new bull cycle for the entire crypto market.

💡 Conclusion: The cryptocurrency market is in a 'spring compression' phase – moving sideways and accumulating while waiting for signals from U.S. monetary policy. When the Fed officially cuts rates, this could be the most powerful catalyst to initiate the next bull run, bringing Bitcoin and altcoins to new heights.