Bitcoin, Ethereum, XRP, and Solana Plunge: Post-Fed Market Explained
The Federal Reserve cut interest rates this month, but the reaction from the crypto market was much weaker than many expected. Investors had expected an immediate rally, especially in altcoins, but Bitcoin continued to move sideways.
Bitcoin slid to around $112,761, down more than 3% over the past week, while Ethereum fell to $4,086, down more than 11% over the same period. XRP fell to $2.89, down more than 6%, and BNB fell to $1,007. Solana saw the sharpest decline among the top assets, falling more than 15% to $208.
Why markets often struggle after cuts
Analyst Scott Melker explains that rate-cut cycles typically follow a familiar pattern. First, the yield curve inverts, then normalizes, and finally the Fed cuts rates. In many cases, markets underperform immediately after these cuts before stabilizing and entering a new cycle a few months later.
This time, Fed Chairman Jerome Powell presented the decision as a defensive move, citing a weak job market and rising inflation while deciding to cut. This kind of message signals underlying economic problems, creating caution rather than excitement. Historically, most rate cuts have occurred because something is wrong with the economy.
Why Cryptocurrency Hasn't Reacted Yet
Stocks rallied in the days following the announcement, and gold is approaching $3,800 an ounce, suggesting safe-haven assets are gaining traction. However, Bitcoin is consolidating, and the expected altcoin rally has yet to really take off.
However, recent token launches have shown strong momentum. Solana and Ethereum made strong moves earlier this year, while new projects like Aster and Hemi have also delivered strong growth. For many analysts, this is a sign of a healthier market structure than in previous cycles.
Market sentiment remains divided
Investor sentiment remains divided. Some traders remain bullish, citing ETFs, new regulations and rising institutional interest as long-term drivers. Others remain bearish, warning that weak economic data and the risk of stagflation could drag all risk assets lower.
Despite this divide, the consensus is that the supply-demand dynamics will keep Bitcoin on solid footing. With ETFs approved, treasury firms buying, and strategic reserve discussions underway, there are currently more buyers than sellers.