The Federal Reserve's interest rate decision is imminent, and the monetary easing cycle may boost the crypto market's frenzy
The Federal Reserve's interest rate decision will be announced at 2 a.m., and the market generally expects this to be the first rate cut of the year. The rate cut action helps improve market liquidity, and the subsequent monetary easing policy is also a significant positive for risk assets like cryptocurrencies!
Several market experts have interpreted the trends of this round of market movements and analyzed the future market direction from different angles. Economist Alex Krüger pointed out that although the market has largely digested the expectation of this rate cut, he remains optimistic about the mid-term performance of stocks and Bitcoin, reminding investors to pay attention to the unique volatility potential of Bitcoin.
Analyst "Ash Crypto" added that the rate cut will not only reduce the appeal of risk-free returns but may also drive a large amount of capital from traditional low-risk assets like government bonds into the cryptocurrency space.
Ash also emphasized that with multiple positive factors such as ETF approvals and a gradually clearer regulatory environment, if liquidity surges in large amounts, it is very likely to trigger a "parabolic rebound" in Bitcoin and altcoins in the fourth quarter of this year.
On the other hand, the weak performance of the US dollar also provides additional upward support for Bitcoin. Since the beginning of this year, the US dollar index (DXY), which measures the strength of the dollar against a basket of major currencies, has fallen by 12%, and the weak environment of the dollar index usually helps enhance Bitcoin's appeal as "digital gold" and a hedge against inflation assets.
In this macro context, Tom Lee, co-founder of Fundstrat Global Advisors, also stated that if the Federal Reserve starts a rate-cutting cycle, it will substantially improve market liquidity and provide strong support for core crypto assets like Bitcoin and Ethereum. He even anticipates that a strong "monster trend" could emerge in the last few months of this year.
Currently, the market's attention is focused on the Federal Reserve's upcoming interest rate decision and the subsequent policy guidance. This crucial decision not only concerns the direction of traditional assets but will also become a core determining factor for whether cryptocurrencies can continue their upward trend and whether a new bull market can be initiated.
