You need to understand the impact of the Fed’s interest rate cut on the cryptocurrency world!
Understanding the background and purpose of interest rate cuts
The Fed usually cuts interest rates to respond to economic slowdowns, reduce borrowing costs, and stimulate consumption and investment. The current rate cut is not due to an economic recession, but to ease the restrictiveness of monetary policy and the inverted yield curve. Therefore, the rate cut may not be large or last long.
Current economic conditions
The Fed's interest rate cut decisions usually take into account the current inflation level, labor market conditions and economic growth prospects. The market generally expects the Fed to start cutting interest rates in September. Current economic data shows signs of easing inflationary pressures and a cooling labor market. Despite the slowdown in growth, the US economy is expected to avoid a recession and achieve a soft landing.
The difference between market expectations and actual actions
Market expectations of the Fed's rate cuts will affect stock prices, but the actual rate cuts may not be in line with expectations. For example, recent economic data show that the US economy is still relatively strong, which may cause the Fed to postpone rate cuts or cut them less than expected. When the actual rate cuts are less than expected, it may trigger a stock market decline.
Bad signals to watch out for when cutting interest rates
The Fed's interest rate cuts are often seen as a signal of poor economic conditions. If the interest rate cut is to respond to the risk of economic recession, it may cause investors to worry about corporate earnings prospects, which will have a negative impact on the stock market. This interest rate cut is a preventive one and has little impact on the market. Referring to the interest rate cut in 2019, the US stock market continued to hit new highs after a slight adjustment.
Liquidity Improvement
Lower interest rates will improve market liquidity, which may be good for the stock market as a whole. Lower borrowing costs are good for small-cap stocks and the crypto market. It has driven up the prices of risky assets.
Is the Fed's rate cut a foregone conclusion? 4 cryptocurrencies surged 100 times in the bull market!
1. YUP
Jupiter tokens continue to trade in an optimistic atmosphere, with a 13.18% increase in the previous day and a trading volume of $167.627 million. In the past week, the price of JUP has increased by 11.71%, and the cumulative increase since the launch of the project has reached 48.04%.
Its relative strength index (RSI) forms a bullish resonance with the average trendline and shows a strong upward trend towards the overbought area on the price chart, suggesting that JUP prices are expected to continue to rise this weekend.
If the bulls can push the JUP price above the $1.160 resistance level, the coin is expected to usher in a new round of gains and is expected to test its all-time high of $1.4950 in the coming period.
2.ICP
Internet Computer, with its unique decentralization concept, has attracted widespread attention in the cryptocurrency field. Despite the recent market volatility, the ICP token has shown positive momentum, achieving a significant increase of 18.69% this month.
Looking back at the past six months, ICP has performed particularly well, with its value soaring by 152.78%. Currently, its 14-day relative strength index (RSI) is 37.67, reflecting that market sentiment is neutral, indicating that it may enter a consolidation phase in the short term. Technical analysis shows that ICP is currently in a period of adjustment after a round of increases.
It is worth noting that once ICP successfully breaks through the resistance level of $11.84, it may rekindle the bullish sentiment in the market. In addition, the trading price of ICP is 4.61% higher than its 200-day simple moving average (SMA) of $9.52, showing good market support.
3. RNDR
Render Network is a decentralized GPU-based rendering solution provider that aims to connect users who want to perform rendering jobs with people who have idle GPUs to handle rendering. Owners can connect their GPUs to the Render Network to receive and complete rendering jobs using OctaneRender. Users send RENDER to individuals who perform rendering work, and OTOY will receive a small portion of RENDER to facilitate transactions and run the Render Network.
Jules Urbach is the founder of Render. Jules sets the strategic vision for OTOY and is the lead architect of the company's technology roadmap. With over 25 years of industry experience, he is widely regarded as a pioneer in computer graphics, streaming, and 3D rendering. He made his first game at age 18 and went on to make the first 3D video game platform on the web, licensing the software to Macromedia, Disney, Warner Bros., Nickelodeon, Microsoft, Hasbro, and AT&T.
4. SHIB
Shiba Inu Coin (SHIB) was initially seen as a meme coin, but has now evolved into a vibrant crypto ecosystem with its own decentralized trading platform ShibaSwap. With its strong community support and ambitious development blueprint, this project has not only stepped out of its original intention of being a meme coin, but has also become a serious cryptocurrency project.
Recently, SHIB has demonstrated its commitment to continued growth and innovation by launching ShibaSwap and the planned second-layer solution Shibarium. These initiatives have strengthened the momentum of its community, and frequent project updates have attracted the attention of many new investors.
