The surge in social media chatter across the extremely anticipated US Federal Reserve September rate of interest determination could possibly be a warning signal for crypto, says sentiment platform Santiment.
It comes after the crypto market rallied on Friday and market sentiment returned to greed following Fed Chair Jerome Powell’s dovish remarks on the annual Jackson Gap financial symposium. He hinted that the primary fee lower of 2025 might are available September.
“Traditionally, such a large spike in dialogue round a single bullish narrative can point out that euphoria is getting too excessive and should sign a neighborhood prime,” Santiment mentioned in a report on Saturday. The agency mentioned that social media mentions of key phrases tied to the Fed and rate of interest cuts have jumped to their highest stage in 11 months.
Santiment urges warning as analysts are divided
“Whereas optimism a couple of fee lower is fueling the market, social knowledge suggests warning is warranted,” Santiment mentioned.
Powell mentioned throughout his speech on Friday that present circumstances in inflation and the labor market “might warrant adjusting” the Fed’s financial coverage stance. In keeping with the CME FedWatch Device, 75% of market contributors anticipate a fee lower on the September assembly.
Many crypto analysts have primarily based their crypto market forecasts on the Fed’s choices all through this 12 months. Whereas some see a fee lower as a possible bullish catalyst, others are divided on the result.
After Powell’s speech, crypto dealer Ash Crypto mentioned, “the Fed will begin the cash printers in This autumn of this 12 months,” together with two fee cuts, which suggests “trillions will circulate into the crypto market.”
“We’re about to enter parabolic part the place Altcoins will explode 10x -50x,” Ash Crypto mentioned.
Analyst warns crypto might face short-term strain
Others recommend that the crypto market might not instantly see the impression of a Fed fee lower.
On April 11, 10x Analysis head of analysis Markus Thielen mentioned, “Anticipating a bullish impulse is just too early.” He mentioned that whereas a longer-term worth alternative for Bitcoin (BTC) might emerge, it could face short-term strain pushed by recession fears.
Associated: BTC climbed to 1.7% of world cash earlier than Fed chair signaled fee lower
In the meantime, some say that if the Fed takes no motion this 12 months, it might result in headwinds for the crypto market.
On March 9, community economist Timothy Peterson warned that if the Fed holds off on fee cuts in 2025, it could trigger a broader crypto market downturn.
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