If the Fed decides not to cut interest rates and Powell announces that the current monetary policy will be maintained, the market may experience a period of volatility, especially for risky assets, and another major stock market crash will occur, whether it is crypto or US stocks.
Possible market reaction: Purge
Bitcoin trend:
The Fed's tightening policy may lead to a sharp drop in price, with Bitcoin fluctuating around $30,000 and even facing short-term correction pressure. Investors usually stay away from riskier assets such as Bitcoin in a high-interest rate environment. This macroeconomic background may lead to cautious market sentiment, reduced trading volume, and increased price volatility.
Ethereum performance:
Ethereum may fall by half and fluctuate between $1,350 and $1,600, and similar macroeconomic pressures will also affect its price trend. As a leading platform for smart contracts, Ethereum is supported by a large number of developers and applications, but under the pressure of the overall crypto market, it is also difficult to avoid a correction or consolidation.
Market sentiment:
Investors are usually more conservative in the context of interest rate hikes or no interest rate cuts, and market funds may flow to safer assets such as the US dollar or Treasury bonds. As a result, liquidity in the crypto market may be weakened and volatility may increase. Traders will adopt a wait-and-see strategy during this period of uncertainty, waiting for the market to become clearer.
If the Fed does not cut interest rates, Bitcoin and Ethereum will fall into a volatile market in the short term, and price range fluctuations will increase. However, as the market gradually adapts to the new interest rate environment, investors may reassess their risk exposure, and the market may find a new balance point.
