Bitcoin News Today: Fed Rate Cut Odds Rise, but Crypto Market Gambles on Autonomy vs. Trump Pressure

Bitcoin traders are closely monitoring the September Federal Open Market Committee (FOMC) meeting, where the U.S. Federal Reserve is expected to decide whether to cut interest rates. The upcoming decision has become a focal point for the crypto market, especially after Bitcoin reached a record high of over $124,000 in mid-August and Ethereum climbed above $4,900 a few days later. However, as the market cools ahead of the meeting, traders are now weighing the likelihood of a rate cut and its potential impact on cryptocurrency prices.

Current market sentiment shows strong expectations for a rate cut. According to Polymarket, traders are placing the odds of a September rate cut at 78%, while the CME’s FedWatch tool pegs the probability at 85.2%. These figures have risen significantly from the 37.66% probability at the end of July. Nevertheless, some analysts remain cautious, highlighting that the Fed’s decision is not a certainty. Morgan Stanley estimates only a 50% chance of a rate cut, citing concerns over inflation and a desire to maintain monetary independence.

Arthur Hayes, co-founder of BitMEX, has joined the chorus of skeptics. In a recent interview, he suggested that Federal Reserve Chair Jerome Powell may resist pressure from President Donald Trump and maintain the status quo, prioritizing the Fed’s autonomy. This view is reinforced by Powell’s recent speech, which hinted at the possibility of rate cuts but stopped short of confirming them. Hayes also referenced the 2022 example, where despite widespread expectations of a recession and rate cuts, the Fed instead raised rates 11 times from March 2022 through July 2023. A similar pattern in 2025 could lead to a sharp correction in crypto markets if traders have already priced in rate cuts that do not materialize.

Despite these uncertainties, the broader market continues to show signs of an emerging altcoin season. Bitcoin’s dominance has fallen from 65% in June to 57.4%, while the total market cap for altcoins has surged to over $1.65 trillion. The CoinMarketCap Altcoin Season Index has also risen from 15 in June to 50, indicating growing momentum across the sector. These trends suggest that the crypto market may be moving into a new phase of altcoin growth, regardless of the Fed’s decision in September.

Additional catalysts are expected to support altcoin gains in the coming months. The U.S. Securities and Exchange Commission (SEC) is poised to make key decisions on several new altcoin ETFs in October, covering projects like Solana, XRP, Chainlink, and Avalanche. Bloomberg analyst James Seyffart estimates a 90% chance of approval for these ETFs. Such regulatory developments, combined with historically strong October performance in crypto markets—nicknamed “Uptober”—could trigger a significant bull run. Market participants are advised to position altcoin portfolios ahead of this potential “ETF Altcoin Season.”

However, market analysts have also raised concerns about overbought conditions in the crypto space. Santiment reported that social chatter around the Fed and rate cuts has reached an 11-month high, signaling potential overconfidence and increased risk of a pullback. On-chain data further support this warning, as exchange-held Bitcoin has increased by roughly 70,000 coins since early June, reversing a trend of withdrawals to cold storage. This shift suggests more supply could enter the market if sentiment turns negative. Meanwhile, technical indicators show Bitcoin struggling to reclaim the $120,000 level, with key support levels now under pressure at $108,200 and $103,800.

Ethereum faces similar risks despite its recent strength. The asset is currently trading near $4,755, with a crucial support zone at $4,550. Santiment’s MVRV readings indicate elevated potential for profit taking, particularly in the short term, which could lead to retracements. Overall, the market is at a critical juncture, where expectations of a Fed rate cut may diverge from actual outcomes, creating volatility and the need for careful risk management.

Source:

[1] The Fed Rate Cut Gamble: Markets Are Betting Big, But ... (https://www.forbes.com/sites/aliceliu/2025/08/28/the-fed-rate-cut-gamble-markets-are-betting-big-but-altcoin-season-may-not-wait/)

[2] Analysts Sound The Alarm: Fed Rate Cut Hopes May ... (https://www.mitrade.com/insights/news/live-news/article-3-1064755-20250825)