Key Points
- The Federal Reserve is expected to cut rates from September to December due to delayed rate decisions.
- Bitcoin, Solana, and Dogecoin are top assets to consider investing in response to this pattern.
The Federal Reserve has been criticized for its timing in adjusting interest rates, with claims that it’s often too late. Market analyst Patric pointed out this pattern on X, noting that the Fed cut rates too late in 2020, raised them too late in 2022, and is now cutting them again too late in 2024.
This consistent delay in decision-making has had significant effects on financial markets. It’s now predicted that the Fed will cut rates monthly from September to December.
Impact on Cryptocurrencies
While these delayed actions pose challenges for the general public, they can be advantageous for cryptocurrencies. The Fed tends to postpone cutting rates when inflation is high to avoid causing harm to the economy. However, with the looming threat of a recession, inflation isn’t the only worry.
Cutting interest rates and possibly increasing the money supply might provide a temporary solution for the economy. Yet, it can negatively affect individuals who only hold cash, as it can lead to inflation and devalue their money. This scenario was also observed in 2020.
Investment Opportunities
These repeated delays in rate decisions can open up opportunities for investing in certain assets. It’s crucial for people to understand how these changes can affect their savings and consider investing in assets that can safeguard their wealth against inflation.
Here are three assets to consider in light of this pattern:
Bitcoin: Covid Crash vs. Recession Crash
Typically, a significant crash or a lengthy consolidation phase precedes a major bull market. The price action of Bitcoin in 2020 mirrors that of 2024. After breaking out of a descending wedge in 2020, Bitcoin rallied to a new all-time high following the COVID-19 crash. Currently, Bitcoin is still in a significant consolidation phase, waiting for the next big breakout.
Solana: Rejection at $110 Support
The SOL chart appears promising. It tested the crucial $110 support and resistance level before bouncing back. This movement touched a key demand level and eliminated many lower prices. Solana is a good option to consider if the price dips.
Dogecoin: Bouncing Back
Dogecoin is rebounding from a key support level, making it a good option for potential long-term gains despite the current market crash. The price has demonstrated a strong recovery at this level, and the formation of a double bottom indicates the potential for significant returns in the upcoming months.
