After the Federal Reserve's third rate cut this year, the cryptocurrency market rebounded, with analysts predicting a larger rebound based on typical post-rate cut patterns.
Analysts say that after the Fed's expected rate cut on Wednesday, the crypto market saw a slight recovery, with a larger rebound likely to follow.
The central bank has cut rates three times in a row from September to December, totaling 0.75%.
According to on-chain analysis company Santiment, despite a long-term bullish outlook on cryptocurrency fundamentals, each rate cut triggers short-term sell-offs, following the classic 'buy the rumor, sell the news' pattern.
However, it added that typically a rebound occurs 'after the dust settles', which can provide predictable trading opportunities.
So far, this latest interest rate cut is no different. Pay attention to slight FUD or retail sell-offs, which could indicate that a mild post-cut pullback has ended.
Lower interest rates and cheaper borrowing costs typically enhance risk appetite and drive more capital toward speculative assets such as cryptocurrencies.
The Federal Reserve's rate cut aligns with widespread expectations.
CoinEx chief analyst Jeff Ko told Cointelegraph that the Federal Reserve's latest interest rate cut was 'widely expected and has essentially been priced in by the market', but its updated dot plot indicates that policymakers' judgment on the next direction of interest rates is 'slightly hawkish'.
More importantly, Ko stated that the $40 billion purchase of short-term government bonds is a 'technical operation for the liquidity of the financial system, aimed at lowering short-term rates, not a large-scale, stimulus-driven plan.'
'But the market interpreted this as slightly bullish, with the U.S. stock market rising and helping Bitcoin rebound alongside broader risk sentiment.'
The Bitcoin market is maturing.
Fidelity's global macro director Jurrien Timmer is looking at longer cycles; he noted on Thursday that Bitcoin has underperformed compared to the stock market this year. However, he stated that the market is maturing compared to previous cycles.
'In real-time analysis, it is difficult to determine if a new [cryptocurrency] winter is coming, but observing the developing wave structure of Bitcoin's maturing network curve, we can see that the recent bull market appears quite mature.'
In the early trading session on Friday, the crypto market showed slight recovery, with Bitcoin rebounding from a post-rate cut low below $90,000, reaching $93,500 on Coinbase.
However, the resistance at this level has proven too strong again, pushing the asset back down to $92,300; at the time of writing, its trading price is at this level.
