As the Fed may cut interest rates by 25 basis points on October 29, the Crypto Assets market is facing new challenges and opportunities. Bitcoin and Ethereum, as the market leaders, are under close follow.

Historical data shows that Fed rate cuts usually have a positive impact on the Crypto Assets market. For example, after the Fed cut rates by 25 basis points on September 18, Bitcoin's price quickly rose by about 1%, driving other mainstream Crypto Assets to strengthen as well. However, investors should also be wary of the pullback risk after "good news is fully priced in". In past rate cut cycles, there has often been a pattern of "anticipated rise, followed by a drop after the policy is implemented."

Currently, the market situation is quite special. Bitcoin has reached a historic high of $126,000 this month, and some interest rate cut benefits may have been priced in ahead of time. In this case, it is not excluded that a "news sell-off" scenario could reoccur, similar to September, when the market evaporated $60 billion in a short period.

Nevertheless, in the long term, a rate cut environment remains favorable for the Crypto Assets market. Low interest rates may enhance the appeal of risk assets, prompting capital to flow into the cryptocurrency space. Additionally, the trend of ETF expansion continues, and if the Fed's policy direction is clear, the ongoing net inflows into ETFs will provide strong support for Bitcoin and Ethereum.

Comprehensive analysis indicates that if the Fed lowers interest rates by 25 basis points as expected this Wednesday, Bitcoin and Ethereum are likely to experience volatility in the short term, and investors should be wary of the pullback risk after the favorable news is realized. If an unexpected 50 basis points cut occurs, it may trigger a significant rise in the crypto market, but caution should also be exercised against a rapid fall due to overheating sentiment.

For investors, closely following the Fed's policy statements and the chairman's speeches is crucial. At the same time, it is important to strictly control position risk and formulate profit-taking strategies in advance. In this uncertain market environment, maintaining a cautious and flexible investment attitude will be a wise choice.