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The US Federal Reserve has finally announced the long-anticipated rate cut, and the benchmark federal funds rate was lowered by 25 basis points. The announcement gave a breath of fresh air to the cryptocurrency market.
After the rate cut, Bitcoin price soared and stabilized at approximately $117,000, while Ethereum and other altcoins experienced an even more significant surge. This recent rate cut is important since the Federal Reserve's action eases economic pressures and contributes to a bit more stability in the crypto market.
Bitcoin has responded most to the Fed rate cut. BTC was already trading actively, and after the rate cut, it received a modest 0.3% gain, settling at around $117,000.
Ethereum is just behind Bitcoin in the surge. After the new price cut, Ethereum rose around 2%, hovering at nearly $4,588. Another coin that joined this price surge is Solana. Among the altcoins, SOL has advanced strongly with a nearly 4.5% gain, pushing its price toward $244.
Speaking about the rise of altcoins, especially Bitcoin, CoinSwitch Markets Desk opined, “The decision carried a dovish tilt, acknowledging slower job gains, rising unemployment, and sticky inflation. The immediate market reaction was muted.”
Further, they explained, “BTC largely consolidated around $115,000 (roughly Rs. 1.01 crore), swinging between $115,000-$117,000 (roughly Rs. 1.01 crore-1.03 crore) and briefly dipping below the support level before buyers stepped in. With momentum now shifting higher, BTC is testing $117,800 (roughly Rs. 1.03 crore) resistance.”
Also Read: Crypto Prices Today: Bitcoin Price at $117,627, XRP Hits $3.09, Dogecoin Surges Nearly 6.5%
Other altcoins have also faced significant gains, with some of these advancements tied to project-specific developments. For example, Avalanche stood out among all with a more than 10% gain in a short period, boosting its price to $32.59. Similarly, Hyperliquid also surged around 7%, rising to $58.43 in the last 24 hours.
About the surge of Avalanche, Min Jung, a senior analyst at Presto, told Decrypt that, “While the Fed's rate cut buoyed broader risk sentiment, AVAX's outperformance seems driven by Avalanche's announcement of a $1 billion Digital Asset Treasury plan.”
Similarly, coming to Hyperliquid’s gains, Ganesh Mahidhar, Investment Professional at Further Ventures, stated, “USDH is attracting liquidity across the board from many institutions.”
Dogecoin (approximately 5%), Cardano (approximately 4.3%), XRP, and Binance Coin posted further gains, underscoring the positive sentiment in the market.
The Fed rate cut serves two different purposes. On the one hand, it increases risk, and on the other, it signals that the high-rate regime may further loosen, as the market hopes for. However, altcoin surges often bring volatility and risk. Tokens like AVAX and HYPE are doing great, but whether this growth will be sustained or not is the primary question.
Whether this rate cut will lead to a long-lasting trend or be simply a response to monetary policy signals depends on the actions and global economic conditions in the upcoming weeks.
