Crypto Market Strengthens, Fed Interest Rate Determines Next Directions

Illustration (photo: Pexels)

JAKARTA - The crypto market has shown significant strengthening in recent days, with the market capitalization going up and the prices of Bitcoin and Ethereum speeding up again.

Based on data from CoinMarketCap as of Tuesday, October 28, the price of Bitcoin was around $114,000 with an increase of 3.5% in the last 7 days.

But behind the optimism of the crypto market, Reku's analia, Fahmi Almuttaqin, said there were specific drivers, sentiments to watch out for, as well as scenarios for the remainder of 2025 and 2026.

Several of the main factors that encourage strengthening include the expectations of cutting interest rates by the US central bank, the Fed, the development of US-China trade negotiations, and the increasing optimism of investors against risky instruments (risk-on).

The sentiment that the Fed this week will again lower the benchmark interest rate creates an inflow into risky assets, including cryptocurrencies, Fahmi said in a statement.

According to him, if the Fed gives a dovish signal or actually confirms there will be a further interest rate drop in December, this could trigger a new risk-on wave.

"On the other hand, if the Fed gives a hawkish signal or delays cutting, then the crypto market can be under pressure again," he added.

If the Fed supports a medium-term easing trend, liquidity will increase, and institutional adoption of crypto has the potential to strengthen, and this could be a bullish momentum.

"However, if the Fed emphasizes their concerns about inflationary projections regardless of the lower interest rate at this October 29 meeting, the market could stagnate or even correct," he added.

If a bullish scenario occurs, Bitcoin has the potential to break out of the range of 120,000-125.000 US dollars (Rp1.99-Rp2 billion).

But if it fails, and a bearish scenario that occurs with Fed preferences to be more careful, then the risk of correction back to the area of $108,000 could increase.