FOMC Rate Cut Could ‘Trigger’ Crypto Price Gains, Says Analyst #CriptoNews

Today’s anticipated reduction in the federal funds rate could “trigger” additional upside in cryptocurrency prices as greater liquidity drives heightened demand for riskier assets, according to Marc P. Bernegger, cofounder of crypto fund of funds AltAlpha Digital.

The Federal Open Market Committee’s announcement, which is expected to reveal a lowering of the target range of the federal funds rate, could easily serve as a bullish catalyst for digital currencies, Bernegger stated via emailed comments.

“I expect a boost for the crypto markets, particularly because lower interest rates tend to increase liquidity and make riskier assets like cryptocurrencies more attractive to investors,” he said.

“A reduction in rates could serve as a catalyst for a year-end rally,” Bernegger added, shedding some light on what could take place over the next several months.

“The potential rate cut might set the stage for a crypto bull market, driven by increased liquidity, lower borrowing costs and a quite favorable market sentiment,” he clarified.

Bullish Market Data

While Bernegger focused on how the anticipated rate cut could combine with broader market factors to fuel significant upside, another analyst emphasized market data and what it says about investors.

“Judging by the activity in the Bitcoin perpetual futures market it seems that traders are anticipating prices to increase,” Julio Moreno, head of research for CryptoQuant, stated via Telegram around 11 p.m. EST last night.

The chart below helps depict this activity:

“Bitcoin Exchange inflows have remained at relatively low levels, indicating that traders are not rushing to deposit into exchanges to sell. We still need to see the activity tomorrow,” he added.

The chart below helps illustrate this activity:

This morning, he provided an updated take on the markets, emphasizing that “everything seems pretty much as yesterday, only lower open interest that signals some long positions being closed to take profits.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.