Crypto traders are treading carefully ahead of Federal Reserve Chair Jerome Powell’s speech later today, which will follow the conclusion of the Federal Open Market Committee (FOMC) meeting. Markets are widely expecting a rate cut a move that could set the tone for risk assets like Bitcoin and Ethereum in the weeks ahead.
Fed Decision Looms: Markets Expect a 25bps Cut
According to data from CME’s FedWatch Tool, traders are pricing in a 99.9% chance of a 25-basis-point rate cut, marking one of the most one-sided expectations in recent months. The probability surged after Friday’s softer-than-expected CPI inflation data, which strengthened bets that the Fed is ready to ease its tightening stance.
The Fed’s policy statement will be released at 6:00 p.m. UTC, followed by Powell’s press conference at 6:30 p.m. UTC. Both events will be live-streamed via the Federal Reserve’s official website and YouTube channel.
Market participants will be paying close attention to Powell’s tone for clues on the central bank’s future path — especially regarding the possibility of additional cuts before the end of 2025. According to Polymarket data, traders now see an 86% chance of a cumulative 75bps reduction by December.
“The market has almost fully priced in a cut,” one analyst noted. “If Powell hints at a slower pace of easing or a more cautious approach, that could rattle risk assets in the short term.”
Crypto Market Reaction: Mild Losses but Steady Sentiment
As investors await the decision, crypto markets have turned slightly lower, reflecting a cautious mood. Data from crypto.news shows the total crypto market capitalization slipped 1.2% to around $3.9 trillion, with most major tokens posting modest daily losses.
- Bitcoin (BTC) traded near $113,446, down 0.6% in the past 24 hours but still up 5% for the week.
- Ethereum (ETH) hovered around $4,017, down 2.3%.
- Solana (SOL) fell 3.6%, while Binance Coin (BNB) edged 1.1% lower.
- XRP stood out, rising 0.4% to $2.63, extending its seven-day rally as traders rotated into high-volume altcoins.
The Crypto Fear & Greed Index remained neutral at 51, just one point higher than yesterday, indicating limited change in investor sentiment.
Meanwhile, CoinGlass data showed that open interest across major exchanges declined 1.34% to $163 billion, while total liquidations rose to about $521 million, mostly from over-leveraged long positions a sign of traders trimming risk ahead of the Fed’s announcement.
What Happens If the Fed Cuts or Doesn’t?
A 25bps cut later today would likely validate current market expectations and reinforce the Fed’s “data-dependent” approach. Such a move could boost risk assets, particularly cryptocurrencies, which historically perform well in lower-rate environments.
However, if the Fed surprises markets by holding rates steady, it could trigger a short-term pullback in Bitcoin and altcoins as traders unwind bullish positions built on rate-cut optimism.
“Crypto tends to front-run macro shifts,” said one market strategist. “If Powell strikes a hawkish tone, we could see immediate volatility before the broader uptrend resumes.”
The Bigger Picture
Today’s decision comes at a crucial moment for both traditional and digital markets. With U.S. inflation cooling and growth indicators stabilizing, investors see rate cuts as a potential spark for renewed capital inflows into risk-on assets like Bitcoin, Ethereum, and Solana.
Still, the outcome will depend heavily on Powell’s language whether he signals this cut as the start of an easing cycle or simply a precautionary move.
Until then, traders remain cautious, preferring to wait for Powell’s words before making their next big move.
