- The Federal Reserve cut interest rates by 50 basis points, more than the anticipated 25 points.
- Fed Chair Jerome Powell expressed caution, stating they haven’t declared “mission accomplished” but are encouraged by progress.
- Global rate decisions vary, with the ECB cutting rates and the Bank of England holding steady; Japan’s next rate decision is highly anticipated.
- Analysts predict a bearish price momentum for crypto but are optimistic as the month ends, looking toward early October developments.
The Fed has done it, finally, rates have been cut, and the cuts were lower than expected. Most pundits were pricing in a 25 basis point cut, and so were naturally a little surprised by the Federal Reserve announcement that it’s a 50 basis point cut.
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Jerome Powell, Chair of the Federal Reserve, said during a press conference following the meeting, that they hadn’t achieved their goal yet but were nonetheless pleased with the progress made.
We’re not saying, ‘mission accomplished’ […] but I have to say, though, we’re encouraged by the progress that we have made.
Jerome PowellQuo Vadis, Crypto?
Naturally, everyone is asking, what’s next?
The Bank of England has just announced that it will hold its rates steady at 5%, while the European Central Bank cut its rates last week.
So, as far as interest rates go, the next important market to look at is Japan. In July, the BOJ actually raised its interest rates by 25 basis points, which at the time shook the markets and sent crypto lower.
The announcement, which should come sometime later on Friday, 20 September, is not generally expected to bring any changes.
Former BOJ official Nobuyasu Atago said:
Having just raised rates in July, the BOJ will likely prefer to scrutinise market developments for the time being.
Nobuyasu AtagoWhile the markets, including crypto, have so far responded well to the US rate cut, an unexpected decision out of Japan could catch the market off guard.
Well-known crypto figurehead Arthur Hayes has criticised the US for its rate cuts and said he worries about the strength of the Japanese yen.
The interest rate differential between the U.S. and Japan narrows with rate cuts. That could lead to sharp appreciation in the yen and trigger unwinding of the yen carry trades.
Arthur HayesPrice Momentum Bearish Right Now, But Not Forever, Says Swissblock
Swissblock analysts wrote in a note that the current market indicators present a mixed outlook, suggesting a shift away from a potential altcoin season back towards Bitcoin dominance, yet without a clear directional move.
Price momentum remains bearish. Despite Bitcoin consolidating above immediate support levels and flirting with breaking above $60k, it still needs to prove its strength above this level.
SwissblockWhile BTC has since risen above that mark, it will be interesting to see if it can maintain that level.
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The analysts conclude that fundamentally, conditions are neutral for now, but there’s a bullish sentiment as the month concludes, looking towards early October.
We are bullish before “Rektember” comes to an end.
Swissblock
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