Bitcoin and other cryptocurrencies have performed well over the past week, with the largest cryptocurrency gaining over 8% in the last seven days and other major cryptocurrencies following in its footsteps.
The Rise in Ethereum and Other Cryptocurrencies
Ethereum $2,656outpaced Bitcoin with a 15.5 percent increase in the same period. BNB 13.7 percent, Solana 9.7 percent and Dogecoin 
$0.10863 It gained 8.1 percent. XRP, on the other hand, followed a more sideways trend, gaining only 0.28 percent.
A large portion of these gains came from the US Federal Reserve (Fed) cutting interest rates by 50 basis points for the first time since 2020. Analysts note that this reduction triggered a rally in the cryptocurrency market.
Analysts at Kaiko wrote in a note on the Fed’s rate cut:
The move raised hopes for a soft landing, a slowdown in growth that doesn’t lead to a recession in the U.S. In response, both U.S. stocks and Bitcoin posted strong gains following the FOMC meeting, with Bitcoin (BTC)
$63,729 Prices rose 5.2 percent in the 24 hours after the announcement.
Sustainability of the Rally in the Future
However, there are question marks over the sustainability of this rally. A report prepared by the Bitfinex exchange suggests that this rise may not continue in the short to medium term. The report states that despite the recent gains, BTC is still below the critical $65,200 level from the end of August.
Bitfinex states that if this level is not exceeded, negative consequences may arise:
If BTC fails to break above this level, it would confirm a pattern we have been seeing since the all-time high of $73,666 in March, where Bitcoin continues its downtrend, failing to break out of any previous highs before forming a new local bottom.
When we look at Bitcoin’s overall movement since March, we see a downward trend. It also raises concerns about the sustainability of the price rally, as the recent rally may have been driven by futures and perpetual markets rather than true spot trading.
US Elections Impact on Crypto Market
Kaiko and Bitfinex emphasize that the US presidential elections in November could have a potential impact on the crypto market. While it has been said many times that Donald Trump would be a better president for the crypto industry, fund manager VanEck has a different opinion.
Matthew Sigel, Head of Digital Assets Research at VanEck, noted that Kamala Harris and Donald Trump will have different impacts on Bitcoin and the broader digital asset markets, but both could be positive for Bitcoin. According to Sigel, the Harris administration could tighten digital asset regulations in the US, which could slow institutional adoption but accelerate structural challenges that could increase Bitcoin adoption:
From a Bitcoin-only perspective, we could argue that a Kamala Harris presidency could be better for Bitcoin than a Trump second term because, in our view, it would further accelerate many of the structural problems that are driving Bitcoin adoption.
On the other hand, a Trump administration could benefit the entire crypto ecosystem by implementing more deregulation, especially for entrepreneurs. Sigel added that regardless of who wins, ongoing fiscal deficits and national debt are expected to weaken the U.S. dollar, and Bitcoin usually strengthens under these conditions.
Although the cryptocurrency market has made significant gains in recent days, analysts are cautious about the sustainability of this rise. Although interest rate cuts and election expectations have positive effects in the short term, long-term trends and market dynamics should be monitored carefully. In particular, the upcoming US elections and political developments may cause fluctuations in the crypto market. It is important for investors to follow market movements and fundamental analysis closely.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
