The United States Federal Reserve, the nation’s central bank, is anticipated to reduce interest rates by 25 basis points (bps) on Wednesday. This expected move aims to support risk asset prices over the longer term.
Crypto asset prices closely track liquidity cycles, as noted by Nic Puckrin, founder of Coin Bureau and experienced market analyst. He explains that while lower interest rates tend to drive asset prices up in the long term, they might also trigger short-term price corrections.
Puckrin highlights, the main challenge is that the rate cut could already be priced in by the market, leading to optimism and a potential ‘sell the news’ reaction. This pullback could especially impact highly speculative areas, such as memecoins, making them particularly vulnerable.
Read more insights on the Federal Reserve’s rate cut and its implications for cryptocurrencies.
