The Federal Reserve cut interest rates this month, but the reaction from the crypto market has been far more muted than many expected. Investors were hoping for an immediate rally, especially in altcoins, yet Bitcoin continues to move sideways.
Bitcoin slipped to around $112,761, down more than 3% over the past week, while Ethereum fell to $4,086, losing over 11% in the same period. XRP dropped to $2.89, sliding more than 6%, and BNB retreated to $1,007. Solana saw the sharpest pullback among the top assets, falling over 15% to $208.
Analyst Scott Melker explained that rate-cutting cycles tend to follow a familiar pattern. First, the yield curve inverts, then it normalizes, and the Fed eventually pivots to cutting rates. In many cases, markets perform poorly right after these cuts before stabilizing and entering a new cycle months later.
This time, Fed Chair Jerome Powell presented the decision as a defensive move. He cited weakness in the job market and rising inflation while still opting to cut. That type of message signals underlying economic problems, which creates caution rather than excitement. Historically, most rate cuts happen because something is wrong in the economy.
Stocks have risen in the days following the announcement, and gold is approaching $3,800 an ounce, showing that safe-haven assets are drawing attention. Bitcoin, however, is consolidating, and the expected altcoin surge has yet to fully take off.
That said, recent token launches have shown strong momentum. Solana and Ethereum posted large moves earlier this year, while new projects like Aster and Hemi have delivered huge gains. For many analysts, this is a sign of a healthier market structure compared to past cycles.
Investor mood remains divided. Some traders are firmly bullish, convinced that ETFs, new regulations, and rising institutional interest are long-term tailwinds. Others remain bearish, warning that weak economic data and stagflation risk could drag all risk assets lower.
Despite this divide, the consensus is that supply-and-demand dynamics should help Bitcoin maintain a strong base. With ETFs approved, treasury companies buying, and discussions about strategic reserves under way, there are more buyers than sellers in the current environment.
Markets often struggle immediately after rate cuts because the action signals underlying economic weakness, causing caution among investors in riskier assets like cryptocurrencies.
Historically, rate cuts can initially cause poor market performance before a new cycle begins months later, as they are often a defensive response to economic problems.
Sentiment is split. Some are bullish due to ETFs and institutional demand, while others are bearish due to risks like stagflation, creating near-term uncertainty.
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