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 price lower of 2025 might are available in September.
“Traditionally, such a large spike in dialogue round a single bullish narrative can point out that euphoria is getting too excessive and will sign a neighborhood high,” 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 degree in 11 months.
Santiment urges warning as analysts are divided
“Whereas optimism a few price 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 “could warrant adjusting” the Fed’s financial coverage stance. In line with the CME FedWatch Device, 75% of market contributors count on a price lower on the September assembly.
Many crypto analysts have based mostly their crypto market forecasts on the Fed’s selections all through this 12 months. Whereas some see a price 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 price cuts, which suggests “trillions will circulate into the crypto market.”
“We’re about to enter parabolic section the place Altcoins will explode 10x -50x,” Ash Crypto mentioned.
Analyst warns crypto could face short-term strain
Others recommend that the crypto market could not instantly see the affect of a Fed price lower.
On April 11, 10x Analysis head of analysis Markus Thielen mentioned, “Anticipating a bullish impulse is simply too early.” He mentioned that whereas a longer-term value alternative for Bitcoin (BTC) might emerge, it might face short-term strain pushed by recession fears.
Associated: BTC climbed to 1.7% of world cash earlier than Fed chair signaled price 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 price cuts in 2025, it might trigger a broader crypto market downturn.
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