The Federal Reserve (Fed) announced its first drop in interest rates of the year, leading to an immediate reaction on the cryptocurrency market. Bitcoin (BTC) experienced a notable drop, falling below the threshold of $ 115,000 shortly after the announcement.
The expert predicts crypto
President of the Fed Jerome Powell tackled The current economic landscape, noting that although inflation has released considerably compared to its mid-2022 summits, it is still high compared to the long-term Fed objective of 2%.
He also pointed out that there are growing rising risks for employment in what he described as a less dynamic labor market. For the future, Powell has indicated that the Fed provides that interest rates will be resolved between 3.5% and 3.75% by the end of 2025, a reduction of 0.50% compared to the current levels.
In addition, he mentioned that the Federal Open Market Committee (FOMC) plans to implement two additional prices reductions during this year.
The market expert Lark Davis went to the social media platform X (formerly Twitter) to share its reflections on the implications of rate cuts. He declared That the relaxation of interest rates suggests that “the monetary printer is lighting up”, providing that the cheaper capital would soon circulate on the cryptography market.
Although Davis has recognized the possibility of short-term declines, as evidenced by Bitcoin’s performance following the rate reduction decision, it remains optimistic about a long-term rally for cryptocurrencies.
Will the rate drops propent Bitcoin and Ethereum again to new heights?
Taurus theory analysts supported these perspectives in a previous analysis, explaining Interest rate reduction strengthens liquidity. They noted that reduced loan costs encourage companies and consumers to spend more, which ultimately stimulates economic activity.
By establishing parallels at the end of 2024, after the Fed began its rate drops, they stressed how Bitcoin reached new heights of all time while Ethereum (ETH) exceeded $ 4,000. This previous rally lasted about two months, suggesting that the current environment could lead to similar results.
Despite the immediate volatility of cryptographic markets, analysts predict that smart money and market whales can try to shake up short -term retail investors. However, they remain convinced that, in a window of three to six months, Bitcoin and other altcoins are likely to negotiate at much higher levels.
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