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🏛️ The Impact of the FED's Announcement on the Crypto Market

The cryptocurrency market, despite its decentralized nature, is strongly influenced by the global macroeconomic environment, with the monetary policy of the U.S. Federal Reserve (FED) being one of the most important factors.

1. The Relationship with Interest Rates

The main mechanism of impact is through the interest rates set by the FED:

• Low Rates like the one I believe will be announced today (Expansionary/Dovish Policy):

• Effect: Borrowing is cheaper and yields on traditional assets are low. There is greater liquidity (more money circulating) in the economy.

• Crypto Impact: Investors seek higher returns and are more willing to take risks. This can drive capital towards cryptocurrencies, seen as a bullish factor.

2. Risk Sentiment (Risk-On / Risk-Off)

• When the FED is optimistic about the economy and a sharp monetary adjustment is not expected (Dovish policy), the market enters a "Risk-On" state (appetite for risk), favoring the rise of cryptos.

3. The Dollar (DXY)

• Weak Dollar: A Dovish policy weakens the dollar, which can be a tailwind for cryptocurrency prices.

Conclusion for Specific Projects

Although these factors mainly affect large assets like Bitcoin (BTC) and Ethereum (ETH), memecoins like PEPE are even more exposed to the volatility derived from the general market sentiment and the capital flows triggered by the FED's announcements.

• Remember: Investors should expect significant volatility before, during, and after important announcements from the FED.