BTC Price Surges Post-Fed Rate Cut, But FOMO Signals Potential Pullback?Following the Federal Reserve's announcement of a rate cut, Bitcoin's price rallied significantly, hitting a three-week high. However, the momentum has since calmed down, with the price starting to pull back
BTC Price Surges Post-Fed Rate Cut, But FOMO Signals Potential Pullback?
Following the Federal Reserve's announcement of a rate cut, Bitcoin's price rallied significantly, hitting a three-week high. However, the momentum has since calmed down, with the price starting to pull back. While the rise is closely linked to the Fed's policy shift, several social metrics suggest that the cryptocurrency's strong run may be nearing its end, at least in the short term.
Bitcoin has been on a notable upswing over the past ten days or so, gaining nearly $10,000 during this period. The rally is largely attributed to the Fed's decision to cut rates. However, the surge in FOMO (fear of missing out) has raised concerns about a potential pullback. Historically, rapid price increases in Bitcoin have been followed by corresponding corrections, such as the pullback after the all-time high in March, and the corrections after the rebounds in early June and late July.
Just last Wednesday (September 11th), after the release of US CPI data, Bitcoin prices plunged, falling to $55,500. But in the following days, as market speculation about the Fed's next move intensified, Bitcoin launched a powerful counteroffensive. Ultimately, the Fed decided to follow in the footsteps of the European Central Bank, the Bank of Canada, and the Bank of England by lowering interest rates, altering its monetary strategy after four years. This decision immediately triggered market volatility, with Bitcoin performing exceptionally well, gaining nearly $5,000 in just a few days, rising from $59,500 to a three-week high of $64,000.
However, Bitcoin's rally has stalled, and the price has retreated back below $63,000. Data from Santiment shows that social media interaction levels have soared to their fourth highest level since early this year, hinting at a potentially sharper correction. Typically, such rapid price gains are followed by pullbacks, and the crypto market is particularly sensitive to this type of response, often moving in the opposite direction.
The Fear & Greed Index, which measures market sentiment by gauging different information such as social media interaction, price movement, and surveys, has moved into neutral territory. The index has climbed 21 points in the past few days, rising to a multi-week high of 54 (neutral) from 33 (fear) on September 17th (the day before the rate cut). Notably, the last time the index rose so rapidly, BTC prices fell from $65,000 to below $52,000 within a few weeks.
While the Fed's rate cut provided a temporary boost to Bitcoin prices, the surge in FOMO and historical trends indicate that the risk of a pullback remains. Whether the market will experience the anticipated pullback and the extent of such a correction remain to be seen.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
