If the Fed doesn’t cut rates and instead raises them (which is highly unlikely but possible), here’s how the crypto market is likely to react:
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📉 Rate Hike = Bearish for Crypto (Short-Term)
❌ Higher rates = less liquidity
➡️ Investors pull out of risky assets like crypto.
📈 Dollar strengthens
➡️ Bitcoin and altcoins may drop as capital flows to safer assets.
💰 Borrowing becomes expensive
➡️ Less leverage in crypto markets (traders unwind risky positions).
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🧨 What Happens If Fed Surprises with a Rate Hike?
🔻 Bitcoin & Ethereum could dip fast (5–10%)
📉 Altcoins would fall even harder (10–20%) due to higher volatility
📊 Stock markets and Nasdaq would likely sell off too
🗣️ Powell would likely have to explain a major inflation scare to justify the hike
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🤔 Realistic Odds?
A rate hike today is less than 1% likely
(Markets fully expect a hold — it would be a massive shock.)
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✅ Bottom Line:
Fed Action Crypto Reaction
🚫 No cut / Hold Neutral to slightly bearish short-term
📈 Rate hike Short-term crash possible
📉 Rate cut Likely bullish (medium-term)
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