A crypto analyst has indicated that the recent decision by the United States Federal Reserve to lower interest rates has already been absorbed by the cryptocurrency market, suggesting that it may be an opportune moment to explore potential selling options.
In a report dated September 23, shared with Cointelegraph, Aurelie Barthere, principal research analyst at the blockchain analytics firm Nansen, noted, “The Fed’s actions have been anticipated by the rate markets; in a way, the Fed was aligning with market expectations last week.”
Barthere emphasized the importance of maintaining a stake in the market: “Keeping a crypto allocation or having skin in the game is prudent, as the Fed has invigorated this bull market. However, much of this is already reflected in the pricing of risk assets.”
She elaborated that Nansen’s preferred strategy is to “trim crypto allocations during rallies,” considering the inherent “asymmetry to the downside.”
Following the Fed’s announcement of the rate cut, market sentiment quickly shifted to a more positive outlook, as indicated by the Crypto Fear and Greed Index.
The Crypto Fear & Greed Index. Source: Alternative.me
On September 25, this index—a comprehensive gauge of crypto market sentiment—recorded a “Greed” score of 59, marking a 14-point rise since the Fed’s announcement of a 50 basis point rate cut on September 18, when it stood at 45 in the “Fear” zone.
Bitcoin’s (BTC) price reacted swiftly to the news. After the Fed’s decision on September 18, Bitcoin surpassed the $60,000 mark for the first time since August 30, approaching the $65,000 level multiple times in the following week.
Bitcoin reached $64,751 on September 25. Source: TradingView
At the time of this publication, Bitcoin is trading at $63,759, according to data from TradingView.
In related commentary, Bitcoin price movements were described as “tough to call” following the Fed’s rate decision, according to Zerocap.
This marked the first rate cut by the Fed since March 2020, which was initiated in response to the COVID-19 pandemic.
Before the announcement, BitMEX co-founder Arthur Hayes expressed at the Token2049 conference in Singapore that he believed the Fed’s rate cut could lead to a market decline due to a “narrowing of the interest rate differential between the US dollar and the Japanese yen.”
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Please note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own due diligence before proceeding.