Cryptocurrency Market Fluctuations Ahead of Fed Policy: Which Altcoins Have the Most Potential?

Source: TokocryptoBlog Original Title: Crypto Market Roaring Ahead of The Fed Decision Original Link: https://news.tokocrypto.com/pasar-kripto-menggila-menjelang-keputusan-the-fed/

Cryptocurrency Markets Experience Major Fluctuations on the Eve of Fed Policy Announcements

The cryptocurrency market experienced sharp gains in the hours leading up to the Federal Open Market Committee(FOMC) policy announcement. Bitcoin(BTC) rose approximately 2.37%, Ethereum(ETH) surged over 6%, marking a significant shift in market expectations. Analysts believe this is a “full bet” on two possibilities: interest rate cuts or at least a dovish pause.

This volatility is interpreted as front-running by large investors or whales, who are trying to accumulate positions ahead of the official announcement to lock in lower prices.

Why Are Interest Rate Changes So Crucial?

Interest rate changes directly impact the supply of cheap liquidity in global markets:

• Rate Cuts = Rising Risk Assets: When central banks signal easing, capital typically flows from low-yield bonds into speculative assets, including cryptocurrencies.

This triggers the so-called liquidity cascade effect, with Bitcoin and Ethereum initially receiving institutional capital inflows. However, the largest percentage gains often occur in mid-cap altcoins that are more sensitive to risk sentiment.

If the Fed adopts a dovish stance, which Altcoins have the most potential?

1. Solana (SOL)

Solana is viewed as the strongest candidate to benefit from liquidity overflow. Its fast transaction speeds and low fees have repeatedly made it a winner during periods of rising risk appetite.

2. Gaming and Metaverse Tokens(SAND and similar projects)

In a low-interest-rate environment, high-risk sectors such as gaming and metaverse projects are regaining attention, as these areas require cheap capital to develop.

3. DeFi Tokens

Lower traditional interest rates make DeFi yields more attractive. The total value locked(TVL) and increased exchange activity could push up the prices of governance tokens across various protocols.

4. Layer-2 Solutions(Optimism, Arbitrum)

L2 is expected to benefit from increased network activity and institutional support for the Ethereum ecosystem.

5. AI Tokens and Mid-Cap Layer-1(FET/AGI, KAS, SUI)

Analysis indicates that capital has quietly flowed into this sector. Recent tight consolidations are seen as early signals of potential volatility outbreaks.

Not All Analysts Agree

Despite high optimism, some analysts warn that the market may have already priced in the dovish scenario. If the Fed signals hawkishness, extreme volatility could occur within minutes.

Moreover, historical patterns show:

• Capital typically flows first into BTC and ETH
• Altcoins only follow after the main trend is firmly established

All Eyes on FOMC

Market expectations are now very clear: dovish decisions could trigger a large rotation into altcoins. The true winners will be determined by a combination of liquidity, project fundamentals, and short-term catalysts.

As volatility has already increased ahead of the announcement, traders are preparing for one of the most decisive moments of this quarter.