Table of Content

• Overview of the Fed Rate Cut and Crypto Market Reaction
• Historical Impact of Rate Cuts on Crypto Markets
• Bitcoin and Major Crypto Assets Rally
• Analysis of Crypto Market Behavior in Low-Rate Periods
• Summary of Market Trends Post-Rate Cut and Election

The Federal Reserve lowered interest rates by 0.25% on Thursday, a decision intended to maintaining greater flexibility as it adresses a cooling labor market and decreasing inflation.

This latest 0.25% reduction lowers the benchmark rate to 4.50% to 4.75%, following a previous 0.50% bps cut earlier in September.

The crypto market has stayed positive, following the Federal Reserve’s decision to reduce interest rates.

Historically, Bitcoin and the broader crypto market have tendet to perform well in low-interest-rate environments. Fed rate cuts often boost investor intrest in riskier assets, resulting in price surges for cryptocurrencies like Bitcoin as investors seek higher returns.

Crypto Market Surges to New Highs Post-Election, Led by Bitcoin and Ethereum Gains

Bitcoin (BTC) has set a new all-time high as the U.S. presidential election concluded, with Donald Trump emerging as the clear winner. Apparently, November and December have shown strong bullish trends for the crypto market, often leading to significant price gains during the year-end period.

Ki Young Ju, the founder of CryptoQuant, insisted that we might not see more than 30%-40% gains from this point forward, contrasting with the drametic 368% surge we saw in the previous cycle.

Despite Crypto Quant founder Ki Yung Ju’s caution, Open Interest set a new all-time high of $45.8 billion while Bitcoin’s new all-time high of $76.4k, indicating robust bullish sentiment. Furthermore, on-chain metrics still remainded below typical cycle peak levels, Additionally, the rally could have further room to grow. Alongside Bitcoin’s surge, other major cryptocurrencies also rallied, with Ethereum witnessed a 7.3% rise following the announcement and Solana posting gains of 3.5%, as the market mainained its upward momentum.

However, Dogecoin fell over 3%, contrasting with the meme sector’s 15% gain. Meanwhile, other sectors showed strong performance, extended their gains include with the AI sector surging 13.5% and the DeFi sector, with 18% gains.