Here’s how the Fed’s expected rate cut will affect Crypto

Bitcoin's Sunday Night Rise Over $105,000 The Federal Reserve is expected to cut interest rates amid broader market expectations, although analysts see a shift in monetary policy as confirmation rather than encouragement for continued alpha cryptocurrency activity.

The leading crypto has gained 3.5% in the last 24 hours to reach $105,004, sending its annual advance of more than 140% on a fast track as several tailwinds, including the latest US election results and ETF flows, have accelerated.

The Federal Reserve is expected to cut rates by 25 basis points to between 4.25% and 4.50% at this week's Federal Open Market Committee meeting. CMEs FedWatch tool.

During the press conference, the instrument shows a probability of 93.4%, which indicates the second consecutive cut after the November reduction.

Luis Buenaventura, head of crypto sales at GCash, said: “I don't think the Fed rate cut will have any significant impact on the price trend because the market has been waiting for it for at least a few weeks now.” Decrypt.

Buenaventura's historical data shows two-thirds of cases where Bitcoin rises 50% in less than 60 days, followed by a further 35% cut in the next two months.

“Bitcoin has grown by 50% in recent weeks, so the odds are in our favor that the momentum will continue,” said Buenaventura.

Market observers also cite structural factors in addition to driving rate policy. As former PayPal COO David Sachs says, “White House AI and Crypto Czar“And the Crypto Advisory Council's recommendations show growing institutional involvement.

Those macroeconomic factors have historically fueled Bitcoin's growth “as investors seek alternatives to traditional assets in a low-cost environment,” said Neil Wen, head of global BD research at Kronos. Decrypt.

Bitcoin is king.

Bitcoin's rally above $105,000 follows a 145% year-to-date gain following a 50% surge in price since the US presidential election.

The broader crypto market followed suit, with Ether (ETH) Back to the $4,000 levelA 17% discount from the previous all-time high in November 2021.

Min Jung, a research analyst at Presto Labs, said: “Price declines are in doubt for Bitcoin, as the market appears to have sold off by 25 basis points in December. Decrypt. “As a result, the actual devaluation could have a direct impact on the price of Bitcoin.”

As the Fed prepares its announcement in two days, traders appear to be focused on technical indicators and adoption metrics rather than policy, suggesting that Bitcoin's trajectory may depend more on market structure and institutional participation than on traditional financial conditions.

“Instead, the focus will shift to the December FOMC summary of economic projections (dot plot) and comments from Powell regarding future rate cuts,” Jung said. “These factors, especially any unexpected developments or surprises, can be key drivers of Bitcoin's price action.”

Edited by Sebastian Sinclair