Bitcoin Reacts to Fed Policy Shift

The global crypto market saw a fresh wave of optimism after the US Federal Reserve announced a 25 basis points rate cut, lowering its benchmark rate to 4 to 4.25 percent. Bitcoin briefly dipped on the news before rallying to trade near $117,300, equivalent to about ₹1.03 crore in Indian markets. Ethereum also gained strength, climbing toward $4,500 or roughly ₹3.9 lakh.

Market analysts noted that Bitcoin consolidated around the $115,000 to $117,000 range before testing resistance levels at $117,800. The move reflected both investor caution and renewed optimism as the Fed signaled the possibility of more rate cuts later this year.

Altcoins Lead the Rally

While Bitcoin’s response was measured, altcoins delivered stronger performances. XRP surged to $3.08, Binance Coin touched $989, Solana rose to $244, and Dogecoin advanced more than five percent to $0.279. Traders highlighted that the rotation of capital from Bitcoin into altcoins hinted at growing investor appetite for higher risk and quicker gains.

Avinash Shekhar, co founder and CEO of Pi42, explained that Ethereum is flashing signs of strength with bulls eyeing new record highs while XRP and Dogecoin are showing sharper movements, suggesting capital flows are shifting beneath the surface.

Liquidity Flows Back Into Crypto

The Fed’s move is expected to redirect funds from money markets into riskier assets such as equities and digital currencies. Edul Patel, CEO of Mudrex, estimated that nearly $7 trillion currently parked in money market funds could partially flow into crypto and stocks, offering much needed liquidity. With the Fed hinting at two more rate cuts in the coming months, traders are watching macroeconomic signals closely.

CoinSwitch analysts added that the rate decision had a dovish tilt, acknowledging slower job growth and sticky inflation. This combination, they said, could sustain demand for alternative assets like Bitcoin and Ethereum in the near term.

What to Watch Next

The market now awaits comments from Fed Chair Jerome Powell along with upcoming economic data to gauge the sustainability of this rally. Analysts suggest that a breakout above $118,500 could open the door to fresh highs while support near $115,000 should cushion downside risks.

The broader outlook remains cautiously optimistic as investors weigh monetary policy shifts, liquidity flows, and the potential start of a stronger altcoin season.

 

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