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Vignesh S G
Vignesh S G
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- Jan 29, 2025 10:47 UTC
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Bitcoin Outperforms Altcoins Amid Fed Rate Decision – Here’s Why
Altcoin market has declined by at least 7.49% since January 18th, with major altcoins like Ethereum and Solana turning bearish.
The anticipated US Federal Reserve interest rate decision is likely the cause of the altcoin downturn.
While altcoins struggle, Bitcoin has shown bullish performance and NVIDIA has seen a surge, indicating some areas of strength in the overall market.
Since January 18, the altcoin market has dropped by at least 7.49%. Over the past 24 hours, nearly all of the top ten altcoins have been in the red, with Ethereum down by 1.4%, Solana by 1.6%, BNB by 0.5%, Dogecoin by 0.7%, and Cardano by 1.3%.
Meanwhile, Bitcoin has shown a strong bullish performance, standing out in an otherwise bearish market.
Let’s understand the market picture in detail.
Why Altcoins Are Struggling
The upcoming US Federal Reserve interest rate decision, set to be announced in the next 24 hours, is playing a major role in the market’s performance. According to crypto expert Michael van de Poppe, the altcoin market’s recent decline is linked to the growing expectation that the Fed won’t be cutting interest rates anytime soon.
January’s Market Journey: A Rollercoaster Ride
At the beginning of January, the altcoin market’s total market cap was $1.33 trillion. By January 6, it reached a peak of $1.49 trillion, but between January 7 and 9, the market experienced a sharp correction of 10.73%. Despite a brief surge on January 9 that pushed it above the January 6 closing price, the market has been mostly declining since January 18.
From January 20 to 26, the market stayed within a range of $1.38 trillion to $1.53 trillion, but by January 27, it fell below this range, and since January 28, it has dropped by another 0.71%.
What to Expect from the Fed’s Decision
The Federal Reserve’s interest rate decision is crucial for the market’s future. The current expectation is that the Fed will keep rates unchanged at 4.25%-4.5%. In December, the Fed made a small rate cut of 0.25%, but they suggested they would pause further cuts for now.
In a recent X post, Michael van de Poppe pointed out that the lack of expected rate cuts is a key reason for the altcoin downturn. He also mentioned that if the Fed hints at future rate cuts, the altcoin market could recover quickly.
While the altcoin market faces challenges, Bitcoin has stood out with a solid 9.9% increase over the past 30 days, signaling strong potential for future growth. Additionally, NVIDIA Corp is bouncing back after a sharp drop, showing a remarkable 8.93% increase in the last 24 hours.
The Market Remains Uncertain
As the crypto market remains volatile ahead of the Fed’s interest rate decision, investors are closely monitoring any hints that could influence market sentiment. While Bitcoin and NVIDIA are showing strength, altcoins are still struggling with the expectation of no rate cuts.
If the Fed signals future cuts, there could be hope for a rebound in the altcoin market.
Likewise, in the last 30 days, Bitcoin has registered a growth of 9.9%, showcasing a strong potential for its future growth.
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The dance between Bitcoin and altcoins takes another turn. Tomorrow’s headlines will tell the next chapter.
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