Altcoins Surging After Fed Cuts Interest Rates, Overtaking Bitcoin and Ether!

One topic of discussion over the past few days has been the Fed's interest rate hike. That's why many crypto experts and YouTubers highlighted the importance of that day and said that day could decide the fate of crypto. They said if the Fed interest rates come low it is a green signal for crypto. For example, last Wednesday, the central bank announced a 50 basis point cut in interest rates. And after this interest rate reduction, the market cap of altcoins has increased quite a bit. But the interesting thing is that the market cap of altcoins has increased slightly more than Bitcoin. Altcoins were strong performers following the Fed's rate cut decision last Wednesday. Altcoins rise more than Bitcoin and Ether whenever the Fed decides to cut interest rates.

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The price of altcoins has increased relatively and there are even many coins that are still bullish that have far surpassed the price of Bitcoin and Ether. This divergence is not unusual, given the poorer liquidity and higher beta of altcoins. Bitcoin stocks are expected to outperform since the Federal Reserve's decision to cut interest rates last Wednesday. Although the price of Bitcoin will increase three to four times from the current time but the real winners in the crypto universe are the altcoins. Because it is expected that all these altcoins can give returns from the current state to sky high prices.

Altcoins have been pumping especially since last Wednesday when the Fed decided to cut interest rates. And as a result of such announcements, the market cap of most altcoins has grown quite a bit. Although our past history has seen September as a negative month for Bitcoin. But since the Fed cut interest rates last Wednesday, other coins, including Bitcoin, have rallied and are reversing a negative month this month. It is not uncommon to see market cap increase like this.

Altcoins have seen better growth than Bitcoin and Ether and even better growth in market cap. Altcoins have a higher beta than Bitcoin and Ether. So they can be considered a leveraged play in the broader crypto market, like technology stocks outperforming the S&P 500 (SPX) during the green shoots.

All crypto assets, including Bitcoin and Ether, may also benefit from recent overselling. However, we can see a good movement in Bitcoin from the end of this month and hopefully the beginning of next month. Moreover, since the US elections are coming up and that can affect the market, we expect to see a good movement in Bitcoin after the election. Will go and it will be a positive movement.

Altcoins are currently on the edge of the liquidity spectrum. We usually see volatility in these markets when the FOMC meeting takes place. Hence performance will always be convex when risk assets perform well and liquidity is abundant. Which seems to be the case after the FOMC. Liquidity is a very important thing in the market because while Bitcoin's liquidity is fairly strong, liquidity in Alts is quite poor. Which results in outsize movement in both directions. Increased short positioning building over the past few months may therefore outperform short squeezes.