In the coming days, the crypto market's attention is focused on the upcoming interest rate decision by the Federal Reserve of the US (Fed) and on the speech by its chairman Jerome Powell.
Will the Fed Slash Interest Rate this Week?
Jerome Powell is under extreme political pressure to speed up the timetable for any interest rate cuts this year. President Trump continues to hammer Powell publicly for not easing policy sooner. Commenting on the matter, Nick Timiraos, Chief Economics Correspondent at The Wall Street Journal, said the Fed may cut rates this week due to lower inflation; however, he noted that the uncertainty of tariffs poses a significant challenge. Powell and many of his fellow policymakers have expressed concerns about the risks of higher prices from Trump's tariffs. Some analysts mention that Powell stressed that the bar for cutting rates remains high in his previous speeches.
Paradox Between Market Cap and Transaction Volume
Meanwhile, CryptoQuant analyst Darkfost pointed out a paradox between crypto market capitalization and transaction volume. The analyst released a chart showing the Bitcoin Net Value to Transaction (NVT) ratio above 2.2. The NVT ratio is used to assess whether Bitcoin is overvalued or undervalued. A value above 2.2 suggests that the market cap is outpacing transaction volume, signaling a possible price reversal that has often preceded corrections in crypto prices.
Combating Volatility in Bitcoin and Altcoin Prices
The prices of Bitcoin and altcoins are currently experiencing intense volatility. Bitcoin has dropped to $105,337, following a 1.2% price drop over the past day. Top market altcoins, including Ethereum (ETH), Solana (SOL), and XRP, also face a downtrend. Analysts note that past rate cuts have resulted in significant price increases for cryptocurrencies, indicating that if the Fed announces a cut this week, it could drive prices up and encourage more individuals to adopt crypto.
In light of the Fed's expected decision and potential interest rate cuts, the crypto market is facing uncertainty that may impact cryptocurrency prices. Investors are closely monitoring developments to make informed decisions.
