Risks for the crypto market amid the excitement around the Fed rate cut
Date: 2025-08-25 Author: Oliver Abernathy Categories: BUSINESS
The analytical company Santiment reported that active discussions of the regulator's policy could serve as a warning for participants in the digital asset market. According to them, it was the "dovish" statements of the Fed Chairman Jerome Powell that became the main impetus for the recent growth of both traditional and crypto assets.
After the official's speech, the S&P 500 index updated its historical maximum, and Bitcoin and gold also showed a strong upward movement. Experts note that such optimism regarding a possible rate cut fuels interest in risky assets, but social media data suggests the need to remain cautious.
According to Santiment, the number of mentions of the words "Fed", "rate" and "cut" reached the maximum level in the last 11 months. Historically, sharp surges of interest in one positive narrative often indicate growing euphoria, which often precedes local market peaks.
The researchers emphasized that the number of forecasts for further price growth is increasing around Bitcoin, while the tone remains neutral regarding Ethereum. At the same time, it is worth paying attention to the possible increase in the number of reports about the imminent renewal of historical maximums of ETH: such dynamics can signal the onset of the FOMO phase among retail investors.
Earlier, other market indicators, including derivatives metrics, also pointed to the likelihood of the cryptocurrency sector entering a downward phase. Thus, analysts warn: despite favorable expectations for a Fed rate cut, excessive investor confidence and an increase in the number of optimistic forecasts may become signs of market overheating.
In general, although the current macroeconomic rhetoric supports demand for digital assets, the risk of a sharp correction remains in the event of a change in sentiment or the release of less optimistic news. Experts advise market participants to take into account not only the statements of regulators, but also behavioral indicators reflected in the dynamics of social media, which often predict turning points in trends.
The situation on the crypto market remains sensitive to expectations regarding US monetary policy, and this factor, according to analysts, will become key in the near future.
