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Gate Research said in a report that the crypto market showed no clear selling pressure even after the Federal Reserve raised its benchmark interest rate in September.
According to the report, the cumulative gains posted by two major cryptocurrencies in the week following the rate hike were 11.58% and 11.94%, respectively, while Solana (SOL) rose as much as 18.70%. Gate Research said the market is more sensitive to how far an actual policy decision deviates from prior expectations than to a rate hike itself. It added that the crypto market showed a different pattern after each of the four rate hikes in 2023, while the sharp drop in 2022 came as aggressive tightening coincided with a credit crisis in the crypto industry. If high rates persist, the appeal of returns on dollar-based assets would increase, raising the opportunity cost of holding crypto, the report said. Gate Research added that if inflation and the labor market gradually cool and expectations for additional rate hikes peak, the market could begin pricing in the possibility of improving liquidity in advance. In that case, it said, the uptrend could spread from BTC to ETH and then across the broader altcoin market.