Honestly, many underestimate how strongly the decisions of the Federal Reserve influence the entire crypto market. The Fed essentially controls interest rates, and this directly affects where the money flows.

When rates are low, borrowing is cheap, and people are more willing to take risks. That's when crypto starts to grow rapidly. It's simple: cheap credit means more money in risky assets. But as soon as the Fed raises rates, the scenario completely changes. Borrowing becomes more expensive, and suddenly bonds look much more attractive than volatile crypto.

I notice that the correlation between interest rates and cryptocurrency prices is quite stable. When the cost of borrowing increases, traders using margin trading start closing their positions en masse simply because it becomes costly. This leads to real sell-offs, which put even more downward pressure on prices.

However, an important point here is: the correlation between rates and the crypto market on short-term horizons is indeed impressive, but long-term investor sentiment often remains positive, even during temporary downturns. Technological development, market sentiment, and other factors also play their part.

So if you're watching crypto, just remember: keep an eye on Fed decisions. They are one of the most powerful drivers of short-term market cycles.