Wednesday’s Federal Open Market Committee meeting was largely viewed as dovish, despite adding to the “stagflation” worries.
The Fed kept its federal target rate unchanged at 425 – 450 basis points, which was in line with the market expectations.
However, the real headline-grabber was the central bank’s decision to slow the pace of its Quantitative Tightening, reducing its monthly redemption cap on Treasury securities from $25 billion to $5 billion from April 1st.
Additionally, the Fed’s dot plot indicates that two interest rate cuts are still on the cards in 2025, a likely bullish scenario for risk assets.
US stocks surged following Wednesday’s FOMC, while the Bitcoin price temporarily rose above $87,000.
The post-FOMC rally has also confirmed the best cryptos to buy for the highly-anticipated Q2 rally.
Summary
US Stocks, Crypto Prices Soar On Dovish FOMC
US stocks rallied post-FOMC, with Dow Jones up by nearly 400 points at market close.
Meanwhile, the Bitcoin price traded as high as $87,400, while Ethereum, XRP, Pepe and Sui temporarily broke above key resistance levels.
The risk assets reacted positively to the Fed’s Survey of Economic Projections, commonly referred to as dot plot, which showed the central bank planning for two interest rate cuts in 2025.
Interest rate traders are also betting on a 50 bps decrease in the Federal target rate by the year-end, data from CME FedWatch reveals.
US President Donald Trump reiterated his call for aggressive rate cuts this year. The current dynamic between the central bank and the White House has drawn comparisons to Trump’s first term, when the Fed, after initially ignoring his calls, was ultimately forced into a dovish pivot.
GMI’s Head of Macro Research Julien Bittel also reveals that the Global M2 money supply is following its trajectory from Trump’s first term. If the trend continues, the Global M2 could reach $112 trillion by the end of Trump’s second term, an extremely bullish scenario for Bitcoin.
In another dovish news, the Federal Reserve has also slowed its Quantitative Tightening, reducing its balance sheet run-off to just $5 billion per month.
The dot plot did reduce 2025 GDP growth projections while marking up its inflation outlook, resulting in stagflation concerns. However, Wednesday’s FOMC is being viewed as largely bullish, paving the way for upside in crypto assets.
Best Cryptos To Buy Now
The post-FOMC rally has confirmed the best cryptos to buy, owing to their bullish charts.
For instance, the Bitcoin price is now trading at $86,000 post-FOMC, above the key 200-day exponential and simple moving averages. A monthly close above the levels would strongly indicate new all-time highs for BTC in Q2.
Similarly, the Ethereum price is back above $2000. Prominent analyst Rekt Capital suggests that ETH could skyrocket to $3,900 in the second quarter if it manages a monthly close above $2200.
Pepe has finally broken the $0.73 neckline, confirming its inverse head-and-shoulder pattern breakout. If the popular Ethereum meme coin stays above $0.73, it could eventually rally to $0.0000105.
Meanwhile, the popular Solana meme coin Fartcoin has broken above the 4-hour 200 EMA for the first time in over a month following its post-FOMC rally. It is now a consensus pick among experts for the best cryptos to buy now.
There is also a significant demand for low-cap cryptos as investors anticipate fresh liquidity in the financial markets following the QT slowdown.
For instance, smart money investors are betting big on the first prominent Solana Layer-2 coin, Solaxy (SOLX).
The SOLX presale has already raised over $27 million in its ICO behind six-figure investments from several whales.
The project’s Layer-2 design features ZK roll-up, data availability tools like Celestia and a Hyperlane-powered multi-chain bridge, which promises to improve Solana’s network throughput and scalability during heavy-traffic periods.
Analysts believe SOLX is undervalued compared to Bitcoin and Ethereum’s L2 coins, with some projecting up to 10x returns for early buyers.
