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Crypto markets remain stagnant despite expectations of Fed rate cuts, with Coinbase analysts warning that monetary easing alone is unlikely to drive a recovery.
<a href="https://crypto.news/tag/coinbase/" target="_blank" rel="noopener noreferrer nofollow">Coinbase</a> analysts question whether monetary easing will act as a catalyst for market recovery, despite traditional financial markets responding positively to falling interest rates.
In an Aug. 23 <a href="https://www.coinbase.com/ru/institutional/research-insights/research/weekly-market-commentary/weekly-2024-08-23" target="_blank" rel="noopener noreferrer nofollow">research report</a>, the analysts highlighted that while traditional markets have reacted favorably to a decline in long-term interest rates, the crypto sector remains largely unresponsive, weighed down by specific supply-side factors and the absence of strong market narratives.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 “[…] the lack of crypto-specific narratives largely leaves the asset class dependent on macroeconomic factors to drive performance.”
 Coinbase.
</blockquote>
Coinbase analysts pointed to several factors inhibiting a market rally, including the ongoing distribution of Bitcoin from the <a href="https://crypto.news/final-mt-gox-repayments-near-as-bitgo-moves-2b-in-bitcoin/" target="_blank" rel="noopener noreferrer nofollow">Mt. Gox rehabilitation</a> process and the U.S. government’s <a href="https://crypto.news/us-govt-sent-594m-silk-road-bitcoin-to-coinbase/" target="_blank" rel="noopener noreferrer nofollow">continued sell-off</a> of seized crypto assets. Additionally, the broader market’s reliance on macroeconomic indicators has left crypto traders hesitant to deploy capital ahead of the Federal Reserve’s September meeting.
You might also like: <a href="https://crypto.news/crypto-at-risk-of-macro-pressure-with-no-catalysts-says-coinbase/" rel="noopener noreferrer nofollow"> Crypto at risk of macro pressure with no catalysts, says Coinbase </a>
<h2 class="wp-block-heading" id="coinbase-cautions-on-rate-cuts">Coinbase cautions on rate cuts</h2>
Despite the market’s anticipation of easier monetary policy, analysts warn that the pace and context of any rate cuts will be crucial. A gradual easing in response to controlled inflation could support markets, while more aggressive cuts in response to economic downturns may have the opposite effect.
However, they downplayed the likelihood of <a href="https://crypto.news/tag/federal-reserve/" target="_blank" rel="noopener noreferrer nofollow">Federal Reserve</a> Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium providing significant market direction.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 “[…] we doubt his comments will have a large impact on risk markets, as the statements at this conference don’t tend to have significant forward-looking implications.”
 Coinbase.
</blockquote>
Instead, market participants are likely to shift their focus to forthcoming labor market data, particularly in light of recent downward revisions to employment figures suggesting a cooling job market. The analysts caution that they “do not believe that rate cuts are a market catalyst per se,” emphasizing that the market’s future performance will hinge on broader macroeconomic trends and crypto-specific factors.
Read more: <a href="https://crypto.news/feds-lean-toward-september-rate-cut-bullish-for-bitcoin/" rel="noopener noreferrer nofollow"> Federal Reserve cracks down on crypto-friendly Customer Bancorp </a>

Coinbase analysts doubt rate cuts will drive market movement

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