Crypto Market Stays Mum Despite Powell’s Rate Cut Signals

The cryptocurrency market, including Bitcoin, continued its downward trend on Monday, even as Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts later this year. Despite these signals, the market faced a general decline of 4.2% at the time of publication.

Historically, lower interest rates have been correlated with rising Bitcoin prices, particularly evident during the 2017 bull run when rates were between 0.75% and 1.25%. However, despite Powell’s optimistic tone, major cryptocurrencies struggled. Bitcoin saw a decline of 3.5%, Ethereum dropped by 2.3%, and Solana fell by 2.6%. 

Additionally, the AI token category, including NEAR, ICP, ASI, RENDER, and GRT, also experienced significant declines.

Despite the market’s current struggles, some analysts remain hopeful about a potential turnaround. Vandell, the co-founder of Black Swan Capitalist, commented, “Very POSITIVE for risk-on assets like crypto. Rate Cuts = Increase Credit Creation = Increased Global Liquidity = Massive Crypto Bullrun.”

His optimism suggests that Powell’s hints at further rate cuts could eventually attract more investors to the digital asset sector.

As it stands, the cryptocurrency market remains under pressure, navigating a complex landscape amid ongoing macroeconomic uncertainties. The outlook remains cautious, with investors waiting to see how the Fed’s policies will impact market dynamics in the coming months.

Also Read: Analysis: Why US Election Outcome Won’t Impact Bitcoin’s Q4 Rally