The US Federal Reserve is expected to announce its interest rate decision after Thursday's FOMC meeting. This Fed interest rate decision will be an important point for the crypto market as it is expected to have a big impact on the crypto price. Crypto prices have already reacted ahead of this macro decision and may once again experience high volatility after the interest rate cut announcement.
Crypto markets are expected to react positively to the decision to cut interest rates after the FOMC meeting. Based on historical data, interest rate cuts by the Fed have brought BTC prices up. With that, the price of other cryptocurrencies also surged along with this major crypto. The last rate cut in March 2020 marked the start of a bullrun for Bitcoin, which sparked a significant rally for altcoins.
The reduction in interest rates by the Fed helps boost investors' confidence to invest or increase their holdings in risky assets such as Bitcoin and altcoins. This will cause more liquidity to flow into the crypto market, which in turn increases the price.
In a post on X, crypto trader Emperor shared his thoughts on how the Fed's interest rate decision at the FOMC meeting could affect the market. He expects the market to jump once the rate cut is announced. Soon after, he predicted that the market would fall as short-term traders and retail investors trading based on events took profits.
Therefore, a rate cut after the Fed meeting could be a 'sell on news' event, leading to a short-term market fall. However, in the medium and long term, Emperor expects the market to become more stable and begin to rise steadily.
Crypto billionaire Arthur Hayes says the upcoming interest rate cut will send Bitcoin and the crypto market crashing. He pointed out that the market is likely to experience a fall in a few days as the interest rate gap between the US Dollar and the Japanese Yen is narrowing. The co-founder of BitMEX also stated earlier this month that the rate cut by the Fed may not go as expected.
The crypto market has a positive long-term outlook regardless of what happens at today's Fed meeting. In the short term, it is expected that there will be a lot of volatility, which could lead to a decrease in the price of crypto. Still, there are many reasons to be optimistic about this crypto asset in the long term. Historical trends show that the market is still far from its peak.
On the other hand, Bitcoin's bull run, which led to a surge in the altcoin market, is just beginning. These major cryptos have historically enjoyed post-halving gains around this period, leading to market gains. Bitcoin reached its peak 480 days after halving. Therefore, no matter what happens after the FOMC meeting, the crypto market is still waiting for a long bullish ride.