Bitcoin News Today: Crypto Market Rises as Fed Rate Cut Odds Hit 94%

The cryptocurrency market is showing renewed optimism as expectations for a U.S. Federal Reserve rate cut in September climb to 92%, according to analyst Crypto Rover [6]. This heightened anticipation is driven by weakening economic data, particularly in the labor market, and more dovish comments from key Fed officials. The CME FedWatch and Polymarket tools have also reflected a growing consensus that a rate cut is likely, increasing to 94% as of recent measurements [10].

The potential for a rate cut is seen as a significant tailwind for risk-on assets like cryptocurrencies. Analysts suggest that such a move would increase liquidity in the financial system, making assets with low or no yield—such as Bitcoin—more attractive [2]. Bitcoin briefly dipped below $114,000 amid market jitters, but the overall trend for altcoins like Ether, XRP, and Cardano remained upward [1]. However, the uncertainty around the timing and magnitude of the rate cut has caused the market to react cautiously.

Major financial institutions, including Goldman Sachs, have adjusted their forecasts, now expecting a rate cut in September, with additional reductions likely in the months ahead [2]. Conversely, some analysts, such as those at Bank of America, have warned that the Fed may delay action due to persistent inflation and a resilient labor market, possibly pushing the first cut to as late as 2026 [1]. This divergence in viewpoints has left the market in a state of flux, with investors closely watching for any new signals from the Fed.

The crypto market’s mixed reaction reflects broader macroeconomic uncertainty. While some investors see a rate cut as a catalyst for a surge in digital asset prices, others remain wary of a potential selloff, especially if the Fed maintains a hawkish stance. Bitcoin could face a test at $124,000 should the rate cut proceed as expected, according to one analyst [1]. XRP has also seen a spike in trading volume, indicating increased investor engagement and speculation [5].

Despite the positive momentum, Bitcoin recently experienced a 4% dip following a $9 billion selloff, though U.S. investors are quietly increasing their holdings amid the dip, suggesting a mix of caution and long-term confidence [9]. The broader market rally has also extended to stocks, with tech stocks and crypto assets both rising by more than 1% as algorithmic trading activity and rate-cut expectations drove buying interest [2].

As the September Federal Reserve meeting approaches, the market remains on edge. The central bank’s messaging continues to play a pivotal role in shaping expectations, with Fed Chair Jerome Powell recently emphasizing a wait-and-watch approach amid global conflicts and inflation risks [1]. This caution has tempered some of the earlier enthusiasm, but the overall sentiment remains bullish as the likelihood of a rate cut continues to rise.

Source:

[1] U.S. Markets Rally on Fed Rate Cut Expectations Stocks https://www.ainvest.com/news/markets-rally-fed-rate-cut-expectations-stocks-crypto-gain-2508/

[2] Analyst Says Bitcoin Price Will Peak Above https://www.mitrade.com/insights/news/live-news/article-3-1012052-20250805

[5] XRP heating up: Surge in trading volume hints at another https://m.economictimes.com/news/international/us/xrp-heating-up-surge-in-trading-volume-hints-at-another-bullish-run/articleshow/123119615.cms

[6] Powell Rate Cut Odds Hit 92%, Markets Eye Rally https://coinfomania.com/powell-rate-cut-odds-92/

[9] US Investors Quietly Increase Bitcoin Holdings After Price Dip https://www.indexbox.io/blog/us-investors-boost-bitcoin-holdings-amid-price-dip-and-geopolitical-tensions/

[10] Stocks surge on Fed rate-cut hopes following disappointing https://energynews.oedigital.com/crude-oil/2025/08/05/stocks-surge-on-fed-ratecut-hopes-following-disappointing-jobs-data