With the Fed delivering a widely anticipated decision, experts are shifting attention to the tone.
Summary
- The Federal Reserve has cut interest rates by 25 basis points, as markets anticipated
- Fed’s tone leans dovish, potentially boosting Bitcoin and altcoins
- Still, altcoins are not out of the woods yet, as there’s no definitive decision on further easing
The Federal Reserve delivered its long-anticipated 25-basis-point rate cut, the first cut of 2025. While markets fully priced the September 17 cut, all attention was on the Fed’s tone and what it signals for the future.
Notably, Fed Chair Jerome Powell emphasized risks to employment and growth and stated that the door was open for more cuts. This, together with the FOMC dissenter who called for a 50-basis-point cut, signals a dovish shift. crypto.news talked to several experts in the crypto space ahead of the decision, asking how this would affect the crypto markets.
A 25-basis-point cut was expected, but the stakes are higher than earlier, says Shawn Young, chief analyst at cryptocurrency exchange MEXC. With inflation still elevated, markets will closely watch the direction the Fed is taking.
In a bullish scenario, a dovish Fed outlook with further expectations of rate cuts could drive flows into BTC and other blue-chip coins, pushing the BTC price towards the $120,000–$125,000 range in the weeks ahead.
Farzam Ehsani, CEO at crypto exchange VALR, also suggested that Bitcoin may continue to face macro pressures. For Bitcoin, the key is the expansion of institutional liquidity, he added.
“Bitcoin’s relative underperformance against Gold and the S&P 500 highlights the current shift in market dynamics… investors are very selective about where they deploy their capital now.”
Fed’s decision could trigger altcoin rotation
According to Arthur Azizov, founder at B2 Ventures, the reaction to the Fed could boost Bitcoin and altcoins or lead to a “sell the news” scenario. The latter alternative is particularly likely if markets see the Fed’s decision as not dovish enough.
“Altcoins are even more sensitive. Solana, now above $230, looks strong but faces heavy resistance near $240-250, while XRP is defending the $2.90-$3.00 zone. The problem is liquidity: unless fresh inflows arrive, traders tend to rotate back into Bitcoin during uncertainty,” Arthur Azizov, B2 Ventures