Will Cryptocurrency Market Recover Further as WSJ Flags Growing Fed Dissent for Rate Cut?

The cryptocurrency market is witnessing a dramatic comeback with Bitcoin rebounding 13% in over a week to reclaim $75,988. Analysts and traders anticipate a recovery amid easing oil and gold price fears, spot ETF inflows, and improving stablecoin flows. Investors now await the Fed rate decision today after the FOMC Meeting.

Fed Officials Dissent Favors Rate Cut as Jerome Powell’s Exit Nears

The upside momentum in the cryptocurrency market coincides with fresh signals that US Federal Reserve officials remain divided. It raises hopes that dissent over Fed rate cuts could pave the way for easier monetary policy ahead, The Wall Street Journal reported on March 18.

At least three governors, including Stephen Miran, Christopher Waller, and Michelle Bowman, are expected to dissent at the March FOMC Meeting. Any dissenting votes will signal upcoming rate cuts as Jerome Powell nears the close of his tenure as Fed chair.

However, inflation concerns stemming from the US-Iran war would lead most Fed officials to hold interest rates steady today, as CoinGape reported earlier. Polymarket data show a 30% chance that the Fed will make only one cut this year, while the odds of zero cuts this year have climbed to 23% over the past week.

Fed officials will likely rely on the latest cooling PCE inflation and weak labor market to show increasing potential for rate cuts this year. CME FedWatch Tool currently signal 41% odds of next Fed rate cut in October.

Cryptocurrency Market Sentiment Improves

As geopolitical concerns related to the US-Iran war subside, cryptocurrency market sentiment has improved. The Crypto Fear & Greed Index rises to 26 (fear) today, after weeks of extreme fear sentiment.

Bitcoin, Ethereum, XRP, Solana, Cardano, and other altcoins are rising amid stablecoin liquidity inflows. Cryptocurrency market analyst Benjamin Cowen said “Stablecoin dominance did break out and this is likely just printing another higher low in the coming weeks.”

Moreover, a more than 3% drop in oil prices to $93 and lower gold prices today have further eased concerns among the cryptocurrency market participants. Also, the rising US stock market supports Bitcoin price’s rebound, with a bounce in correlation with tech stocks again.

In a major crypto regulatory development, the SEC and CFTC unveiled token taxonomy classifying Bitcoin, Ethereum, XRP, Solana, Cardano and Dogecoin as digital commodities.

The 68-page guidance divides crypto assets into categories and aims to reduce regulatory uncertainty while positioning the U.S. as a crypto capital. This clarity removes a longstanding hurdle and is expected to encourage further institutional adoption and investments.

Analyst Ali Martinez predicts Bitcoin to rally after a daily close above the $73,344 resistance. For bullish momentum to sustain, bulls need to hold for further upside to $79,234 and $85,555. Meanwhile, popular analyst Big Cheds recommends buying BTC as the 4-hour chart points to continuation.