Bitcoin: The world of cryptocurrency is always full of ups and downs. Sometimes sudden decline and sometimes surprising jump, the excitement of investors always remains intact. The fear that was in the market recently regarding Bitcoin (BTC) and Ether (ETH) is now gradually decreasing. Investors are now seeing a new ray of hope, and the biggest reason for this is the upcoming Federal Reserve (Fed) rate cut decision, which is to be announced on September 17.
Why has the downside fear of Bitcoin and Ether reduced
Till a few days ago, the market environment was slightly negative. There were fears of a decline in Bitcoin and Ether. But now the data of the options market is showing that this fear has reduced to a great extent. Bitcoin’s seven-day call/put skew (which tells whether investors are more inclined towards bullishness or bearishness) has improved from -4% last week to almost 0. That is, investors have now come to a state of balance between bullish and bearish.
Something similar is happening with Ether. The decline in the 30 and 60 days skew data has also been compensated. This simply means that the big players of the market are now counting on the possibility of prices rising more than falling.
Why is the Fed rate cut decision so important
The next big move in the crypto market will depend on how much the Federal Reserve cuts interest rates on September 17.
- If there is a cut of 25 basis points (bps) i.e. 0.25% as expected, then bitcoin will slowly move up. This will be a stable and controlled growth.
- But if the Fed surprises everyone and cuts by 50 bps i.e. 0.50%, then there can be a big bang in the market. Bitcoin, Ether and even Solana (SOL) can go up at a fast pace.
Experts say that a 50 bps cut will be a kind of “super boost” for the crypto market. According to Greg Magadini, director of Amberdata, this situation will signal tremendous buying for ETH, BTC and SOL.
Current situation of Bitcoin and Ether
Looking at the current situation, Bitcoin has risen by more than 4% in the last seven days to cross $116,000. At the same time, Ether has shown a rise of about 8% to reach $4,650. That is, the market is already moving towards an uptrend in anticipation of the Fed’s decision.
If there is a cut of 25 bps, then Bitcoin will slowly climb up and show stable growth. At the same time, Ether may take some time to touch its all-time high of $5,000 again. But if there is a 50 bps cut, then new history can be made for both coins.
Return of Alt Season
A term is often heard in the crypto world – Alt Season. This means the time when not only Bitcoin but other Altcoins (like Ether, Solana and others) also move up at a fast pace. Looking at the current situation, experts believe that the Alt Season may start in the coming days with the return of retail investors.
Solana options on the Deribit platform are already showing an uptrend. Call options are trading at a higher premium than puts. This clearly indicates that investors are confident that Solana will also see a big jump in the coming days.
Investors’ eyes on the Fed
Now all eyes are on the decision of the Federal Reserve. Every movement in the crypto market will depend on how much the interest rates are cut. While a 25 bps cut will give a balanced edge to investors, a 50 bps cut can take the crypto market to sky-high heights.
Meanwhile, gold will also not remain untouched by this decision. If there is a cut of 50 bps, then gold prices can also take a tremendous jump. That is, this decision is going to affect not only crypto but the entire global financial market.
The coming few days can prove to be very exciting and important for crypto investors. Bitcoin and Ether are already showing signs of boom, and if the Fed takes a big decision, then the coming time can write history. This is the time for investors to be cautious, because the market can take a surprising step at any moment.
Disclaimer: This article is written for information purposes only. The things given here are not investment advice. The crypto market is highly volatile, so before making any kind of investment, be sure to consult a financial advisor.
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