The Federal Reserve’s recent interest rate cut has fueled notable surges in several altcoins, including Fantom (FTM), Sui (SUI), and Near Protocol (NEAR). The cryptocurrency market responded positively to the news, with these altcoins seeing double-digit gains.
Despite the immediate surge, the long-term outlook remains uncertain as market volatility continues.
Federal Reserve Cuts Interest Rates by 50 Basis Points
On Wednesday, the Federal Reserve implemented its first interest rate cut since 2020, reducing the rate by 50 basis points. The announcement triggered a rapid response in the cryptocurrency market, pushing the prices of several altcoins higher.
Fantom (FTM) rose over 14% and is currently trading at $0.64. Sui (SUI) also rallied more than 13% in the last 24 hours to reach $1.34. These altcoins have benefited from the market’s overall positive reaction to the rate cut.
In addition, Near Protocol (NEAR) gained over 10%, trading at $4.47 as the market reacted to the Federal Reserve’s decision. NEAR has been on an upward trajectory for the past three days, continuing its momentum in response to the rate cut.
Is Altcoin Season on the Horizon?
The sharp gains in Fantom, Sui, and Near Protocol have led to speculation about the potential arrival of an altcoin season. Altcoin season occurs when smaller cryptocurrencies outperform larger ones like Bitcoin.
The Federal Reserve’s rate cut may have set this stage by creating favorable conditions for altcoins to thrive.
Fantom’s 14% increase within a single day reflects the rapid reaction of traders. Similarly, Sui’s 13% gain underscores the potential for more growth in altcoins. Near Protocol’s 10% increase suggests a continued trend of altcoin strength after the Federal Reserve’s decision.
Santiment’s View on Bitcoin Following The Fed Rate Cut
While altcoins surged, Bitcoin’s future direction remains linked to crowd sentiment. According to on-chain analytics firm Santiment, the number of mentions of Bitcoin in specific price ranges can help predict its next move.
Bitcoin Sentiment Analysis. Source: Santiment
Santiment’s analysis suggests that the market is fearful when Bitcoin prices are between $50,000 and $59,000. When mentions are between $60,000 and $69,000, sentiment is neutral, while mentions between $70,000 and $79,000 indicate greed, suggesting the market could be nearing a top.
The firm advises monitoring social media to gauge crowd sentiment, as it could impact Bitcoin’s price movement.
U.S. Elections Could Influence the Crypto Market
Although the rate cut has triggered immediate gains, the upcoming U.S. elections in November could bring uncertainty to the market. Many in the crypto industry believe that the election results could significantly affect the future of cryptocurrency, depending on how the regulatory landscape evolves post-election.
As the election approaches, the crypto market remains politically and economically sensitive.
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