Crypto Surges Ahead of Fed Rate Cut Decision

The primary cryptocurrency, Bitcoin (BTC), experienced a sharp, though partially retraced, rally in the hours leading up to the Federal Reserve’s scheduled announcement. Data from TradingView showed BTC briefly exceeding $94,500 before settling around $93,000, still representing a solid 3% gain on a 24-hour scale. This price action underscores the market’s sensitivity to macroeconomic signals, with the anticipated rate cut seen as a potential catalyst for risk assets like cryptocurrency. The failure to sustain the intraday peak highlights the persistent presence of selling pressure and the cautious sentiment that often precedes major central bank communications.

Despite the pullback, Bitcoin’s market influence remains formidable. Its market capitalization climbed to nearly $1.85 trillion, and its dominance over the altcoin sector stands at approximately 55.38%, according to the report. This indicates that while alternative cryptocurrencies are gaining, Bitcoin continues to command more than half of the total crypto market’s value. The asset’s performance is being closely watched as a bellwether for the sector’s reaction to the Fed’s policy shift, with analysts from sources like CryptoPotato noting the potential for additional volatility post-announcement.

While Bitcoin posted respectable gains, the spotlight shifted to leading altcoins, which delivered even more impressive returns. Ethereum (ETH) jumped 9% to around $3,350, and Cardano (ADA) surged by a notable 12% to tap $0.47. This outperformance suggests a ‘risk-on’ rotation within the crypto market, where investors seek higher potential returns beyond the flagship asset. The rally was notably broad-based, with Avalanche (AVAX), Polkadot (DOT), Worldcoin (WLD), Internet Computer (ICP), Hyperliquid (HYPE), and Dogecoin (DOGE) all registering daily gains in the 5% to 8% range.

Further exemplifying the bullish sentiment, privacy-focused coin Zcash (ZEC) continued its uptrend, trading above $430. The overwhelming positivity left only a handful of assets in the red, with Pi Network (PI), Bittensor (TAO), Tron (TRX), and Bitcoin Cash (BCH) witnessing minor losses. This near-universal green across the board, tracked by platforms like QuantifyCrypto, propelled the total cryptocurrency market capitalization to approximately $3.26 trillion—a 3.3% increase from the previous day. The synchronized move highlights how monetary policy expectations from traditional finance are increasingly dictating flows in the digital asset space.

The catalyst for the day’s rally is unequivocally linked to the Federal Reserve. Market participants, guided by data from prediction markets like Polymarket, had priced in a near-certain (96%) chance of a 25-basis-point interest rate cut. Such cuts are traditionally viewed as bullish for non-yielding, speculative assets like cryptocurrencies, as they lower the opportunity cost of holding them and can increase liquidity in the financial system. The market’s pre-emptive surge reflects this established correlation, with traders front-running the expected dovish pivot.

All eyes are now on Fed Chair Jerome Powell, whose official announcement and subsequent commentary could trigger the next wave of market movement. The key question is whether the rally has fully priced in the decision or if Powell’s tone—hinting at the future path of rates—will introduce new volatility. The event demonstrates the cryptocurrency market’s maturation and its growing entanglement with global macroeconomic policy. As noted in the analysis, the reaction underscores ‘increasing sensitivity to traditional monetary policy decisions,’ marking a significant evolution from the sector’s earlier isolation from mainstream finance.