The Federal Reserve Divided on Interest Rate Cut, Crypto Sentiment Shifts to Fear Zone

The minutes from the September Federal Reserve meeting, released on Wednesday, revealed a division among policymakers on how aggressive the central bank should be in cutting interest rates. According to the minutes, “a substantial majority of participants” favored a half percentage point rate cut, although some expressed concerns about the size of the cut.

“Crypto sentiment has moved back into the fear zone (39), reinforcing the contrast with 72 (greed) in equities,” noted Alex Kuptsikevich, a senior analyst at FxPro. He explained that the appreciation of the dollar and the increased attractiveness of bonds have reduced institutional interest in bitcoin, leading to the shift in sentiment.

The dollar index (DXY) rose to 102.97, its highest level since August 16, marking a 2.7% increase since the low of 100.18 on September 30, according to data from TradingView.

Overall, the uncertainty surrounding interest rate cuts and the changing dynamics of the cryptocurrency market have created a volatile environment for investors. It remains to be seen how these factors will continue to impact the financial markets in the coming weeks.