Key Insights
- •Zcash is among the top three altcoins to watch, as its strong negative correlation with Bitcoin could lead to gains if Bitcoin remains weak.
- •Uniswap may see benefits as capital flows towards Decentralized Finance (DeFi) following the rate cut, supported by consistent whale accumulation and increasing Decentralized Exchange (DEX) activity.
- •Monero exhibits strong short-term momentum, a negative 7-day correlation with Bitcoin, and identifiable breakout levels on its price chart.
The Federal Reserve's 25 basis point rate cut has introduced a mixed sentiment across the cryptocurrency market. Bitcoin has shown weakness, largely because the rate cut was anticipated and already priced in by traders. In such scenarios, altcoins that exhibit distinct movement patterns from Bitcoin are likely to experience a boost.
Certain DeFi tokens could also perform well, as the crypto community may seek safer avenues for earning returns rather than making substantial spot market positions. Here are the top three altcoins that are positioned to benefit from this market dynamic.
Zcash Leads the Top Three Altcoins if Bitcoin Stays Weak
Zcash (ZEC) frequently moves in the opposite direction to Bitcoin. Its one-year correlation coefficient has consistently stayed close to -1.0, indicating that Zcash often appreciates when Bitcoin depreciates.
Furthermore, privacy-focused coins like ZEC have demonstrated resilience and positive performance recently, even amidst broader market volatility.
The 25 basis point rate cut by the Fed had been factored into market expectations for weeks. Consequently, many traders chose to sell Bitcoin following the announcement. If Bitcoin's downward trend continues, Zcash is well-positioned to capitalize on its inverse correlation.
Although Zcash experienced an 8% decline on the day of the announcement, it has still managed to gain approximately 13% over the past week. The price chart highlights a critical resistance level at $573, which corresponds to the 0.618 Fibonacci retracement level. A sustained break above $573 could pave the way for a more significant upward movement.
It is noteworthy that the ZEC price has found support at an ascending trendline, maintaining a bullish pattern that suggests potential for further upward momentum.
The narrative surrounding privacy in the cryptocurrency space is also gaining traction this cycle, which provides additional support for Zcash, particularly when Bitcoin is experiencing weakness. This confluence of factors makes Zcash one of the top three altcoins to monitor closely in the aftermath of the Fed's rate cut.
Uniswap Joins the Top Altcoin List As DeFi Use Grows
Uniswap (UNI) maintained stability around the Federal Reserve's announcement. However, traders seeking to generate returns without taking on substantial spot market risk often pivot towards DeFi protocols during such periods.
As the largest decentralized exchange (DEX) in the market, Uniswap typically benefits from increased DeFi activity. A rise in swap volume and trading fees can directly translate into higher demand for the UNI token.
Data indicates that the top 100 UNI wallets have increased their holdings by 2.53% in the last 30 days, signaling significant accumulation by large holders in anticipation of the Fed's decision.
The price chart for UNI continues to show underlying strength. The token has held its position above the crucial support level at $4.74. If Uniswap manages to sustain this support, the next significant resistance level to watch is $6.47.
A decisive break above $7.20 would be necessary for a more substantial price surge. If DeFi adoption accelerates following the rate cut, Uniswap is poised to be among the top three altcoins experiencing a rapid positive response.
Monero Completes the List With Strong Support
Monero (XMR) has demonstrated positive performance over the last 30 days, recording gains of approximately 2.7%, while most other altcoins have remained flat or declined. Monero also exhibits a negative 7-day correlation with Bitcoin, indicating its tendency to move independently in the short term.
Monero is currently trading within an upward-sloping channel. The immediate resistance level is situated at $439, followed by a higher level at $470.
Should Bitcoin continue its weak performance, Monero could significantly benefit from its inverse correlation.
The ongoing interest in privacy solutions also bolsters Monero's appeal, solidifying its position as one of the top three altcoins that could see gains in the post-rate cut environment.
The Federal Reserve's rate cut did not immediately trigger a broad rally in the cryptocurrency market. However, it has influenced potential capital flows. If Bitcoin remains weak due to the rate cut being pre-priced, Zcash and Monero stand to gain from their negative correlation with the flagship cryptocurrency.
Simultaneously, if investors increasingly favor DeFi for yield generation, Uniswap could experience a surge in activity. These three cryptocurrencies—Zcash, Uniswap, and Monero—are therefore the top altcoins to watch in the period following the Fed's rate adjustment.