Crypto Market Unmoved by Fed Rate Cut; Powell Keeps Door Open to More

Core Viewpoint - The U.S. Federal Reserve cut the federal funds rate by 25 basis points, marking its first interest rate cut of 2025, but this move did not significantly impact the cryptocurrency market, which had anticipated a deeper reduction [1][2][7]. Market Reaction - The Federal Open Market Committee's decision to lower rates to the lowest level this year had minimal effect on digital assets, as the market had already priced in these expectations [2][8]. - Bitcoin experienced a brief increase from $114,794 to $117,198 but ultimately closed lower within 24 hours [2]. - Ethereum followed a similar trend, rising from $4,429 to $4,586 before retreating, remaining approximately 8% below its all-time high of $4,923 [3]. Liquidation Events - The lack of sustained upward movement in the cryptocurrency market led to significant liquidations, with around $400 million in long and short positions being wiped out within 24 hours post-announcement, affecting over 110,000 traders [3][8]. Future Rate Cut Expectations - Fed Chair Jerome Powell indicated the possibility of at least two more rate cuts later in the year, contingent on economic conditions [4][8]. - Futures markets adjusted to reflect expectations of two to three additional cuts before the end of 2025 [4]. Political Pressure - President Donald Trump reiterated calls for more aggressive rate cuts, despite dissent from one of his appointees to the Fed, Stephen Miran, who favored a deeper cut [5]. Market Sentiment - Analysts noted that the muted response in digital assets suggests a "sell the news" environment, but long-term sentiment remains optimistic, with expectations of increased liquidity benefiting Bitcoin and altcoins [8].