Cryptocurrency traders are hopeful of a market rally after the US Federal Reserve held interest rates steady on Wednesday, according to crypto sentiment platform Santiment.
However, analysts are divided on whether a short-term market rally is a reliable signal for traders.
“For now, traders are expecting a bullish rally even though no changes have been made,” Santiment said in an
The social media discussion score rose from about 9 to 71 in the hours following the Federal Reserve’s “expected outcome” on Wednesday to keep rates steady at 3.5-3.75%.
Fed policy is a strong catalyst for crypto markets
“This is probably due to the fact that the bearish price action related to the lack of cuts already occurred yesterday,” Santiment said.
Historically, Fed policy has been a major catalyst for optimism among cryptocurrency market participants, with traders seeing rate cuts in 2025 as a sign of a potential bullish year for Bitcoin.
However, keeping rates steady could raise expectations of cuts.
Several analysts said they expect a cryptocurrency rally, but are divided on how long it could last.
The “bull trap” may be on the horizon
Bitcoin (BTC) on-chain analyst Willy Woo recently warned that a possible “bull trap” may be forming, a false signal that Bitcoin is entering an uptrend before retracing to the downside.
Bitcoin has fallen 4.35% in the last 24 hours, trading at $70,790 at the time of publication, according to CoinMarketCap.
Meanwhile, crypto analyst Matthew Hyland said that Bitcoin and the broader crypto market “will see a significant rally” once the stock market finds its bottom and recovers. The S&P 500 has fallen 3.73% in the last 30 days, according to Google Finance.
Echoing a similar sentiment, cryptocurrency trader Mustache said in an X post on Monday: “What you will see in the coming months is a massive rally.”
Other indicators suggest that cryptocurrency investors are still taking a cautious approach to the market.
The Crypto Fear & Greed Index, which measures overall crypto market sentiment, fell back into “Extreme Fear” territory on Wednesday, after briefly rising to “Fear” the previous day.