A recent analysis by a cryptocurrency expert suggests that the Federal Reserve’s decision to reduce interest rates was already reflected in the crypto market, indicating that it could be an opportune moment to explore selling options.
Aurelie Barthere, the principal research analyst at blockchain analytics firm Nansen, noted in a report dated September 23, shared with Cointelegraph, that the market had anticipated the Fed’s actions. “In a way, last week, the Fed was aligning itself with market expectations,” Barthere commented.
She emphasized the importance of maintaining a crypto investment strategy, stating, “It makes sense to keep some skin in the game since the Fed has provided additional momentum for this bull market. However, much of the potential risk is already factored into asset prices.”
Barthere elaborated that Nansen’s preferred approach is to “trim crypto allocations during market rallies,” given the potential for downside risks.
Following the Fed’s rate cut announcement, market sentiment shifted positively, as reflected by the Crypto Fear and Greed Index.
The Crypto Fear & Greed Index. Source: Alternative.me
As of September 25, this index, which gauges the sentiment in the crypto market through various factors, rose to a “Greed” score of 59, marking a 14-point increase since the Fed’s announcement of a 50 basis point cut on September 18, when the score was at 45 in the “Fear” territory.
Bitcoin’s price reacted swiftly to the news. After the Fed’s decision on September 18, Bitcoin (BTC) surged past the $60,000 mark for the first time since August 30, flirting with the $65,000 level several times in the week that followed.
Bitcoin reached $64,751 on September 25. Source: TradingView
At the time of this report, Bitcoin is trading at $63,759, according to data from TradingView.
Related: Bitcoin price movement is ‘tough to predict’ after Fed rate decision — Zerocap
The Fed’s decision represented its first rate cut since March 2020, a response to the economic impacts of the COVID-19 pandemic. Prior to the announcement, BitMEX co-founder Arthur Hayes expressed at Token2049 in Singapore that the Fed’s rate cut could potentially lead to a market downturn, as it would “narrow the interest rate gap between the US dollar and the Japanese yen.”
**Disclaimer:** This article does not offer investment advice or recommendations. Every investment and trading decision carries risks, and readers should undertake their own research prior to making any choices.