Bitcoin reacted upwards after rate cuts!

Hello!

We finally have rate cuts from the Federal Reserve!! For months the market was expecting it, and finally it happened. Interest rates have been high for long time, and it was creating big pressure on economy, on debt, and on small businesses. Now the Fed had no other option but to start cutting, because the system cannot survive with such expensive money forever.

Many people think this is good news, but we need to be careful. Rate cuts can bring some relief, but at the same time they show weakness. It means the economy is not strong enough to stand by itself. If everything was really fine, there would be no reason to lower rates so soon. The cuts are like a medicine, but they don’t cure the real sickness, they just delay the pain.

For Bitcoin and crypto, this is usually positive. Lower rates mean more liquidity, cheaper money, and investors looking for alternatives. Stocks also benefit, at least in the short term. But we must not forget, when the Fed starts cutting, it is because something is broken under the surface. So markets can go up first, but also volatility can be very strong after.

Today, after the rate cuts, Bitcoin reacted strong, at the time of writing these words Bitcoin is trading at $117,500! The price moved up fast in the hours after the announcement, showing that the market already was waiting for this kind of decision. Investors immediately saw Bitcoin as a winner, because cheaper money always find its way into risk assets and into the strongest hedge of all, BTC.

At the moment Bitcoin is trading higher compared to the days before the cut. The volume also increased, which is a clear signal that more people are paying attention. Some traders think this could be the start of the next big leg up, because the liquidity injection will combine with the natural cycle of Bitcoin halving. This is usually when new money enters with force.

I hope you have a great day!
Enjoy the green in the markets!

Posted Using INLEO