After the performance of the chairman of the US Federal Reserve System, Jerome Powell, which was on August 22, increased the likelihood of reducing the key rate in America, and this event may affect the cryptocurrency market.
Among experts there are two opposite opinions regarding the consequences of reducing the key rate. The trader, known under the pseudonym Ash Crypto, was among the supporters of the bull rally:
The head of the 10X Research research department, Marcus Tilen, adheres to a different point of view and believes that the reduction in the rate, on the contrary, will lead to a decline in the cost of virtual currencies amid fears about the recession of the economy. In this case, only Bitcoin, considered digital gold, will be able to count on the influx of investments.
Employees of the analytical company Santiment are also in no hurry to rejoice at the news about the possible reduction in the key rate. In their opinion, the euphoria caused by this message most likely reached the peak and will soon decline. Therefore, the bull moods of traders may come to an end. In addition, the growth of the promotion, provoked by Powell’s performance, is able to shift the focus of attention from digital assets to the expensive securities of American enterprises.
Given these factors, it makes sense to prepare for the beginning of the bear trend, which should come in the cryptocurrency market in the fall, according to the theory of cycles. The descending trend has long been shallow, because the level of capitalization of digital assets is growing since January 2023, subjecting only to short corrections.
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Source: Cryptocurrency

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