Cryptocurrency markets are closely watching the Federal Reserve’s potential policy moves and how they could affect prices. According to CNBC, Raphael Bostic, President of the Atlanta Fed, favors only one interest rate cut this year as the central bank tries to balance fighting inflation with avoiding a recession. Previously, the Fed projected two quarter-point cuts in 2025. However, Bostic’s statement emphasizes that the current economic situation necessitates higher interest rates than anticipated earlier in the year. Historically, rate cuts tend to be bullish for risk assets like cryptocurrencies. When borrowing costs decrease and traditional investment returns are less appealing, investors often turn to more speculative markets seeking higher yields, potentially driving liquidity into crypto. However, high interest rates can negatively impact cryptocurrency prices. Crypto market action Following a shaky start on Monday, the cryptocurrency market rebounded as broader risk assets recovered. Bitcoin’s price, which had fallen as low as $102,000 on Monday after hitting a record high of $106,600 for the week, has now reached $105,000. The crypto market bounced through early Tuesday trading with some altcoins declining in value while others rose. Bitcoin was up 2.3% in the last 24 hours to $104,864, ETH gained 4.09% to surpass $2,400, DeFi lending platform Aave (AAVE) led large-cap cryptocurrencies with a 20% jump in the last 24 hours to $262, while Maker jumped by 7%. Stellar, Shiba Inu, Avalanche and Dogecoin saw gains of nearly 2%, while Tron (TRX) posted gains of about 4%.