The crypto market is witnessing a surge in optimism following recent comments from Fed Chair Jerome Powell about potential interest rate cuts. The Fear & Greed Index indicates a strong shift towards greed.
Overview of Market Sentiment
The Fear & Greed Index, which gauges overall market sentiment, rose to a greed level of 60 on Saturday, up 10 points from Friday's neutral score of 50. Earlier in the week, the index briefly dipped into fear, highlighting recent market volatility.
Response of Major Cryptocurrencies
Bitcoin (BTC) reacted with a 5% surge, reaching $117,300 and triggering the liquidation of nearly $380 million in short positions. Ether (ETH) surged over 11%, reclaiming its all-time highs of 2021 close to $4,878, reflecting strong momentum in the crypto market.
Expectations from the Fed and Possible Outcomes
Market data from the CME FedWatch Tool suggests that 75% of participants expect a rate cut at the Federal Reserve’s September 17 meeting. However, some Fed officials remain cautious. St. Louis Fed President Alberto Musalem stated that more data is needed before deciding on support for a rate cut. Crypto enthusiasts had anticipated this rally throughout the week.
The cryptocurrency market continues to be influenced by macroeconomic factors, and imminent decisions from the Federal Reserve may have a significant impact on price dynamics. Analysts are closely monitoring the Fed's policy changes.
