The Fed’s 25-basis-point rate cut, the first in nine months, sent Bitcoin briefly above $117,000, reflecting heightened liquidity expectations.
Yet the median FOMC projection of just 50 bps in total cuts this year tempers the optimism, diverging from market hopes of 68 bps, and introduces a risk of near-term volatility as traders recalibrate.
Historically, crypto has dipped 5 to 8 percent following rate cuts before resuming its upward path, suggesting a potential “sell the news” phase in the days ahead.
Despite this caution, the broader backdrop remains constructive. Lower yields on money-market funds redirect capital toward alternatives like digital assets, bolstering Bitcoin’s role as a risk-on hedge.
With a correlation to equities hovering around 0.9, crypto could benefit from reallocations out of the $7.2 trillion parked in cash-like instruments.
Inflation at 2.9 percent may limit the pace of further easing, but the dovish tilt still provides a foundation for measured growth.
In the near term, Ethereum and Solana may outperform on ETF-driven inflows and network catalysts, while Bitcoin consolidates before targeting $123,000 to $150,000 if subsequent cuts materialize.
This environment calls for patient positioning in liquid majors, complemented by hedges against dollar strength, as markets navigate a probabilistic Fed path.
Overall, the cut marks a bullish but measured shift for crypto, underscoring its resilience as macro conditions evolve.
Ryan Lee, Chief Analyst at Bitget
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