#Fed Rate Cut Ahead#

Fed's Interest Rate Decision: A New Bull Run for Crypto Markets?

Markets have largely priced in the Fed's 25 basis point rate cut at today's meeting. However, the possibility of a more aggressive 50 basis point cut is not entirely ruled out. It seems likely that the Fed will take stronger action, especially if unemployment, inflation, and growth data turn out worse than expected.

Why Is the Fed's Stance Critical?

Not only the Fed's decision today, but also its interest rate policy moving forward will be decisive for the markets. The direction of these decisions will largely be shaped by data.

If a 25 bps cut is delivered as expected: A slight short-term rise and an increase in risk appetite are expected.

If a surprise 50 bps cut or a strong "dovish" approach is delivered: The possibility of a larger jump could be on the horizon.

However, if a "patient/cautious" tone is adopted or the market interprets it as "not strong enough," the possibility of a correction in risky assets should not be ignored.

Possible Scenarios in Crypto Markets

High-risk assets (ETH, DeFi, Layer-2 projects): Offer greater potential for gains due to increased liquidity. However, losses could also be steeper if a decision falls short of expectations.

Projects with ETF expectations (Solana, XRP, etc.): These projects, particularly those attracting institutional interest, may benefit more from potential capital inflows.

Lessons from Past Cycles

Historically, the beginning of the Fed's interest rate cut cycles, combined with ample liquidity, a low-yield environment, and the search for alternative investments, have created positive momentum for risky assets.

However, not every cycle results in the same outcome:

If inflation remains higher than expected, the Fed may be forced to tighten again.

Global economic and political risks can undermine bullish expectations.

Overly optimistic expectations could lead to a correction, leading to the perception that "the price has already risen."

Conclusion: A New Bull Run?

Yes, this interest rate cut could be the start of a new bull run for crypto. However, this requires:

Not just the first step, but also ample liquidity,

a balance between growth and data,

and a clear dovish approach from the Fed.

A 25 bps cut is expected.

A 50 bps surprise creates an additional risk premium.

A positive rally in Bitcoin and major altcoins is likely in the short term, fueled by liquidity inflows.

However, high volatility and potential correction risks should also be kept in mind.

⚠️ This information is not investment advice. Please conduct your own research.
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