Crypto traders eye ‘bullish relief rally’ after Fed holds rates steady
By Anonymous
Expectation of a relief rally came despite a widely used crypto sentiment indicator falling back into “Extreme Fear” on Wednesday.
Crypto traders have become hopeful for a market rally after the US Federal Reserve held interest rates steady on Wednesday, according to crypto sentiment platform Santiment.
However, analysts are split on whether a near-term market surge is a reliable signal for traders.
“For now, traders are expecting a bullish relief rally in spite of no changes being made,” Santiment said in an X post on Wednesday, pointing to an increase in bullish sentiment among crypto market participants on social media who are linking the Fed’s steady rates to a potential crypto rally.
The social media discussion score surged from roughly 9 to 71 in the hours after the Fed’s “expected outcome” on Wednesday to hold rates steady at 3.5-3.75%.
“This is likely due to the fact that the bearish price action related to the lack of cuts already occurred yesterday,” Santiment said.
Fed policy has historically been a major catalyst for optimism among crypto market participants, with traders eyeing rate cuts in 2025 as a signal for a possible bull year for Bitcoin.
However, a pause in rates can increase expectations that cuts could come next.
Several analysts said they are expecting a crypto rally, but they are divided on how long it could last.
Bitcoin (BTC) onchain analyst Willy Woo recently warned that a potential “bull trap” may be forming, a false signal that Bitcoin is entering an uptrend before reversing lower.
Bitcoin has fallen 4.35% over the past 24 hours, trading at $70,790 at the time of publication, according to CoinMarketCap.
Meanwhile, crypto analyst Matthew Hyland said that Bitcoin and the broader crypto market will “see a significant rally” once the stock market finds its low and rebounds. The S&P 500 has fallen 3.73% over the past 30 days, according to Google Finance.
Echoing a similar sentiment, crypto trader Moustache said in an X post on Monday, “What you’ll see in the coming months is a massive rally.”
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Other indicators suggest that crypto investors are still taking a cautious approach to the market.
The Crypto Fear & Greed Index, which measures overall crypto market sentiment, fell back into “Extreme Fear” territory on Wednesday, after briefly moving up into “Fear” the day prior.
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Source: CoinTelegraph
