Bitcoin may have kicked off 2025 with a rebound back to $100,000, but since the release of the U.S. Federal Reserve’s December 2024 Federal Open Market Committee meeting on Jan. 8, the BTC/USD exchange rate dropped to as low as $91,220.84.

Bitcoin has stabilized at around $95,000 since then, but concerns run high whether further news about the future direction of interest rates and monetary policy will result in an additional negative impact to the performance of Bitcoin and other cryptocurrencies.

As cryptocurrencies have entered the financial mainstream, they have become increasingly sensitive to policy changes from the Federal Reserve. With this in mind, let’s take a closer look at the latest news from the Fed, and see what it could mean for the performance of both Bitcoins and altcoins in the months ahead.

Why Cryptos Fell on The Latest Fed News

As revealed in the aforementioned Fed meeting minutes, the central bank once again cut interest rates by 0.25%, or 25 basis points. This was in line with expectations. However, while the latest rate cuts arrived as expected, other takeaways from the meeting minutes caught investors off-guard.

Namely, the Fed’s signaling of its plans to reduce the number of 25-basis point rate cuts in 2025. Before the meeting minutes hit the street, the market was still expecting four such cuts throughout the year. The latest remarks from Fed officials regarding quantitative tightening also suggested that the “Fed pivot” this year will not be as rapid of a shift from hawkish to dovish as previously anticipated.

Taking this into account, it’s not completely surprising that Bitcoin has once again encountered negative volatility. Nor is it surprising that more volatile altcoins, like Ethereum, Solana, and Dogecoin, have all experienced double-digit declines over the past week. As “risk-on” assets, cryptocurrencies, especially altcoins, perform better during times of accommodative fiscal policy.

Yet while the Fed may be not turning as dovish as previously expected, and is in fact continuing to engage in monetary tightening, the impact of these policy decisions on cryptocurrency prices in 2025 may not be as dire as it seems at first glance.

What This Means for Bitcoin and Altcoin Prices in 2025

Although the cryptocurrency market reacted negatively to the Fed’s current policy gameplan, said plans could still result in further upside for Bitcoin and other cryptocurrencies. For one, the planned implementation of fewer 25 basis-point rates still means a further loosening of monetary policy, helping to justify additional upside for this “risk-on” asset class.

Second, with regards to Bitcoin, other positive factors are at play that could drive further upside for the largest cryptocurrency by market capitalization. These include increased institutional and retail investor allocation, as well as the specter of a more favorable crypto regulatory environment from the incoming Trump administration.

Binance CEO Richard Teng commented on what we can expect in the crypto industry in 2025, “We expect to see development across all aspects. Crypto regulation saw great growth across the world in 2024 and we expect to see more in 2025. Given the recent U.S. presidential election and expected crypto regulation from its new government, we expect to see other countries follow the lead from the U.S. and enact more legislation across the world.”

Teng continues, “In terms of institutional interest, financial giants like BlackRock and Fidelity entered the crypto business in 2024, and we expect to see more new players next year. More companies are learning about crypto and integrating crypto features like tokenization into their business. This is a trend that has grown for years and we expect to see more development in.”

Admittedly, the recently-announced changes to the Fed’s rate cut plans could still negatively impact the performance of altcoins in the short-term. Altcoins are much more sensitive to changes in fiscal policy. Nevertheless, if a bull market continues in Bitcoin, chances are it will spill over into the altcoin space as well. Investors profiting from a continued run up in the price of Bitcoin could cycle their gains into Ethereum, XRP, Solana, and other major and emerging altcoins.

The Bottom Line

Over a longer timeframe, the Fed’s decision to more cautiously lower interest rates and loosen fiscal policy may do little to threaten the long-term bull case for cryptocurrencies. Due to a variety of trends, including the proliferation of exchange-traded cryptocurrency investment products, institutional and retail capital inflows into cryptocurrencies are poised to continue.

Of course, nothing’s for certain. For instance, following the latest jobs report, there is growing doubt whether the Fed will further walk back its 2025 rate cut plans. Even if the Fed sticks to its current plan, this asset class is likely to stay highly volatile. Caution and patience remain key.

Nevertheless, taking into account not just the Fed news,but the other positive trends at play as well, the opportunity for long-term price appreciation with Bitcoin and other cryptocurrencies is still on the table.

Lido DAO (LDO) is experiencing a 12% price surge, trading at $2.08 after weeks of sideways momentum. The altcoin remains stuck under a month-long barrier of $2.20, unable to break out. 

Investor support remains tepid, raising concerns about LDO’s ability to sustain its recent gains and achieve further upward momentum.

Lido DAO Investors Are Bearish

The Global In/Out of the Money (GIOM) metric shows that approximately 200 million LDO tokens worth over $403 million are awaiting profitability. This supply was acquired when LDO traded between $2.07 and $2.30, making a rise above $2.30 critical for these holders. Until this level is surpassed, the majority of this supply remains unprofitable.

Breaking through the $2.20 resistance is essential for LDO to give these investors a chance at profitability. The prolonged consolidation below this barrier has limited bullish sentiment. If LDO fails to gain momentum, investors could grow increasingly cautious, further suppressing the altcoin’s price potential.

Lido DAO’s macro momentum is under scrutiny as the Chaikin Money Flow (CMF) indicator hovers around the zero line. This suggests that inflows and outflows are evenly balanced, with no clear preference for buying pressure. To spark bullish momentum, the CMF needs to flip this line into firm support and continue rising.

Currently, the lack of consistent inflows highlights investor hesitation, which could hinder LDO’s ability to post sustained gains. If inflows don’t materialize, the altcoin’s upward trajectory may falter, keeping prices stuck within the same range.

LDO Price Prediction: Finding Support

LDO’s 12% increase over the last 24 hours has brought its price to $2.08. However, the altcoin is now facing significant resistance at $2.20, a barrier that has held firm for over a month. Despite recent gains, LDO’s ability to rally further remains uncertain.

The persistent resistance at $2.20 has prevented LDO from reaching $2.30, the critical level needed to turn a significant supply of tokens profitable. If this resistance continues to hold, LDO’s price could remain stuck in a consolidation range between $2.20 and $1.56, frustrating bullish investors.

If LDO manages to breach the $2.20 resistance, it could flip this barrier into support and aim for $2.61. Such a move would invalidate the bearish outlook, turning unprofitable tokens into gains and potentially reigniting investor confidence in the altcoin’s long-term potential.

The cryptocurrency market has surged today, fueled by a 44% rise in trading volume over the last 24 hours. This comes after Thursday’s decline in market activity, reflected by the 2% drop in total market capitalization.

As the market recovers, Reploy (RAI), Mantra (OM), and THORChain (RUNE) are some of the altcoins trending today.

Reploy (RAI)

AI-based token RAI is one of the trending altcoins today. It currently trades at $5.66, noting a 4% price decline over the past 24 hours. This price dip is accompanied by a 10% spike in daily trading volume, confirming the surge in selloffs.

When an asset’s price drops while its trading volume rises, it indicates heightened market activity. More traders are selling off assets, possibly driven by fear or negative sentiment. This divergence suggests increased market volatility and the potential for further downward pressure.

RAI’s price could drop toward $3.76 as downward pressure strengthens. Conversely, a resurgence in RAI demand could drive the token’s value up to $7.67.

Mantra (OM)

OM, the native coin of the real-world asset (RWA) Layer-1 (L1) blockchain Mantra is another asset trending today. It trades at $3.62, witnessing a 1% price hike in the past 24 hours. 

However, this slight uptick merely mirrors broader market gains, as selling activity remains underway in the OM spot markets. Readings from its Elder-Ray Index, which is at -0.12 at press time, confirm this. 

This indicator measures the strength of an asset’s bulls and bears by comparing the high and low prices to an exponential moving average (EMA). When the index is negative like this, it indicates that bears are dominating the market, suggesting downward pressure and a bearish trend.

If this trend persists, OM’s price could fall to $3.10. However, if the bulls regain market control, they could drive the coin’s price toward its all-time high of $4.63. 

THORChain (RUNE)

THORChain’s RUNE is currently trading at its lowest price since October. Over the past 24 hours, its value has dropped by 19%. At $2.40, RUNE is sitting below the red line of its Super Trend indicator, signaling strong bearish pressure in the market.

This indicator is a trend-following technical analysis tool that helps traders identify the market’s direction by placing a line above or below the price chart based on the asset’s volatility. When an asset’s price trades below the Super Trend line, it typically signals a bearish trend, indicating that the market is in a downtrend or that selling pressure is dominant.

If the downtrend continues, RUNE’s price could fall to $1.92. On the flip side, a resurgence in RUNE accumulation could drive its price to $4.17.