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Market Snapshot: Crypto Cap Climbs as Bitcoin Moves Toward $118K
The global cryptocurrency market capitalization rose about 2% to roughly $4.2 trillion on Thursday, led by Bitcoin's steady march toward the $118,000 mark after the Federal Reserve implemented its first interest rate cut of the year. Overall gains were measured as investors digested the Fed's cautious stance on future easing.
Key price moves
Bitcoin traded near $117,426, up about 1% during intraday trading. Ether advanced around 2.8% to approximately $4,609, while XRP increased roughly 2.9% to $3.10. These moves reflected a modest risk-on tilt across major crypto assets while broader market participants monitored macro signals.
Fed Decision: 25 Basis Point Cut, 11-1 Vote
The Federal Open Market Committee voted 11-1 to trim the benchmark federal funds rate by 25 basis points to a target range of 4.00% to 4.25%. The lone dissent came from newly confirmed governor Stephen Miran, who favored a larger half-point reduction. Futures markets, tracked by the CME FedWatch tool, had priced in a 25 bp cut with about 96% probability in advance, leaving little room for a surprise-driven rally.
Market reaction and the "buy the rumour, sell the news" effect
Because traders had largely anticipated the rate move, much of the potential positive impact was already reflected in asset prices. Market observers described the dynamic as a classic "buy the rumour, sell the news" scenario, where pre-positioning dampens immediate follow-through after official announcements.
Why the Cut Matters for Crypto
Lower rates generally reduce the cost of capital, which can make risk assets—including cryptocurrencies—more attractive relative to cash and traditional fixed-income instruments. Andrew Forson, president of DeFi Technologies, noted that a lower hurdle rate could funnel more capital into digital assets, staking products, and blockchain projects that offer yield alongside price appreciation.
Liquidity, futures, and short-term caution
Despite the rate cut, derivatives metrics showed steady open interest in Bitcoin futures and no major liquidation cascades immediately following the Fed announcement. That restraint reflected Fed Chair Jerome Powell's emphasis that the quarter-point reduction was a risk-management step rather than the start of an aggressive easing cycle. Powell's cautious language, plus upcoming U.S. inflation and growth data, has kept traders from taking larger directional bets in the short term.
Outlook: Gradual Gains Expected if Easing Continues
Historical patterns suggest crypto rallies after Fed easing can take weeks to materialize. For instance, following the Fed's December 2024 easing, Bitcoin experienced a short-lived surge before entering a period of consolidation and later sustained gains. Market strategists, including Tom Lee of BitMine, have argued that continued easing could produce outsized returns for Bitcoin and Ether over the next few months, a view consistent with the idea that liquidity-sensitive assets perform well in easing cycles.
For now, the crypto sector has absorbed the Fed's move with measured optimism. Traders and investors will be watching the Fed's trajectory and next meetings—especially the October gathering—for clearer signals on whether this cut marks the beginning of a broader policy shift or a one-off adjustment. Key on-chain indicators, futures positioning, and macro releases will likely govern the pace of any sustained crypto rally.
Source: cryptonews
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