Analysts predict a rebound in bitcoin amid the Fed’s loose monetary policy

The cryptocurrency market has shown moderate growth following the expected decision of the US Federal Reserve to cut interest rates, and analysts predict further increases. Over the past three months, the Fed has cut the rate three times, by a total of 0.75%. Although this decision is generally considered positive for the digital asset market in the long run, each previous cut was accompanied by short-term sell-offs, a typical «buy on rumors, sell on news» reaction, according to analyst firm Santiment. At the same time, after stabilization, the market usually shows a recovery.

Santiment experts emphasized that the current situation is no exception and that a rebound is expected after a short downturn. According to the analysts, a small wave of panic or sales by retail investors may indicate the end of the correction. Lower interest rates and cheaper loans traditionally increase interest in risky assets, including cryptocurrencies, contributing to the inflow of capital into the market.

CoinEx chief analyst Jeff Ko noted that the latest Fed decision was «widely expected and already priced in,» but the regulator’s updated forecast for further rate dynamics was «somewhat hawkish.» He also explained that the purchase of $ 40 billion worth of short-term Treasury bonds was a technical step to maintain liquidity, not a large-scale stimulus program. Nevertheless, the markets reacted positively to the event, with US stocks rising, which helped bitcoin recover amid growing risk appetite.

In his analysis, Jurien Timmer, Director of Global Macroeconomics at Fidelity Investments, noted that bitcoin has been lagging behind stock markets this year, but the digital asset market itself is showing signs of maturity. According to him, even if it is difficult to determine whether a new «crypto-winter» cycle has begun, the structure of the previous growth indicates the evolution of the bitcoin network and its gradual stabilization.

On Friday morning, bitcoin BTC $90,586.57 Mezo Wrapped BTC 0.29% Market capitalization $51.41 million VOL. 24 hours $1 billion rose from a sharp low below $ 90,000 to $ 93,500 on the Coinbase exchange, but failed to maintain this level and dropped back to $ 92,300. Despite localized fluctuations, experts believe that the Fed’s looser monetary policy and gradual rate cuts are creating the preconditions for a larger rally in the cryptocurrency market in the coming months.