PANews reported on December 19 that Bitwise Chief Investment Officer Matt Hougan published an analysis stating that the Federal Reserve's announcement of a 25 basis point rate cut and a reduction in next year's rate cut expectations from four to two has triggered a significant pullback in risk assets. The S&P 500 fell by 3%, the Russell 2000 small-cap index dropped by 4.4%, and the price of Bitcoin fell from about $106,000 to below $99,000, followed by a slight recovery. Meanwhile, approximately $600 million worth of leveraged long positions in the crypto market were liquidated, exacerbating market volatility.
Matt Hougan believes that this pullback is merely a temporary fluctuation and does not change the long-term bullish trend of the cryptocurrency market. He points out that the Federal Reserve's influence on the crypto market has weakened, while internal drivers in the crypto space are stronger, including Washington's policy shift to support crypto, increased institutional investment and ETF inflows, government and corporate purchases of Bitcoin, and significant breakthroughs in blockchain technology.
In addition, he mentioned that the 10-day exponential moving average for Bitcoin (approximately $102,000) remains above the 20-day exponential moving average (approximately $99,000), indicating that the market trend is still positive. Overall, he believes the crypto market is in a multi-year bull market, and short-term interest rate adjustments will not change this trend.
