The recent surge in social media chatter about the expected US Federal Reserve September interest rate decision has sparked warnings from sentiment platform Santiment that the crypto market may be due for a correction. According to Santiment, the massive spike in discussion around the potential rate cut could indicate that euphoria is getting too high, potentially signaling a local top.
Santiment’s analysts note that while optimism about a rate cut is fueling the market, social data suggests caution is warranted. The firm has seen a jump in social media mentions of keywords tied to the Fed and interest rate cuts to their highest level in 11 months.
Crypto traders are divided on the outcome of the expected rate cut. Some, like Ash Crypto, believe that a rate cut will lead to trillions of dollars flowing into the crypto market, causing altcoins to explode in value. However, others, such as 10x Research’s Markus Thielen, warn that expecting a bullish impulse is too early and that the market may face short-term pressure driven by recession fears.
The Federal Reserve has hinted at the possibility of a rate cut in September, which could have significant implications for the crypto market. If the Fed takes no action this year, it could lead to headwinds for the market, according to network economist Timothy Peterson. With the market currently experiencing high levels of speculation and euphoria, Santiment’s warnings serve as a reminder that caution is necessary when navigating the complex world of cryptocurrency.
Source: https://cointelegraph.com/news/us-federal-reserve-rate-cut-crypto-market-red-flag-santiment