Crypto Market Looks to Bounce Back as Fed Rate Cuts Come Into View
After a rollercoaster week sparked by new tariffs and sudden price swings, crypto markets are catching their breath — and shifting their focus toward the possibility of Federal Reserve interest rate cuts.
Eyes on the Fed
According to market expectations, the Fed is on track to cut rates four times in 2025, with 0.25% reductions penciled in for June, July, September, and December. For crypto, that’s generally good news. Lower interest rates tend to boost demand for risk assets like Bitcoin (BTC) and Ethereum (ETH) by making traditional investments less attractive and increasing liquidity.
The next big clue comes with Friday’s U.S. non-farm payroll report — a closely watched economic indicator. If the job market shows signs of slowing, the Fed may feel even more pressure to start easing.
“Investors are hoping for a softer print,” said analysts at QCP Capital. “That would give the Fed more reason to move forward with cuts, potentially fueling a bounce across risk markets.”
Tariff Turmoil Triggers Selling
Earlier this week, former President Donald Trump reignited global trade fears by announcing a 10% tariff on all imports, a move that caught markets off guard. Crypto traders initially pushed prices higher ahead of the speech, but that optimism quickly evaporated after the announcement.
Tokens like BTC, ETH, XRP, and SOL gave up their gains, mirroring the broader market pullback.
Data from CryptoQuant shows that in the hours surrounding the announcement:
- Over 2,500 BTC were moved to exchanges in a single block.
- ETH inflows hit a peak of 80,000 per hour.
- XRP transfers to Binance surged to 130 million in one hour, compared to a normal hourly flow of under 10 million.
These inflows suggest investors were looking to reduce exposure and lock in profits amid the uncertainty.
Signs of a Rebound
Despite the chaos, the market began to rebound early Friday. Bitcoin held firm above $83,100, ETH reclaimed the $1,800 level, and XRP, SOL, and ADA each climbed more than 2%.
QCP Capital noted that although short-term volatility remains, many crypto assets appear oversold, and risk positioning is relatively light — two conditions that often precede a short-term bounce.
“Traders are still cautious, but the stage may be set for a relief rally,” QCP added.
With Fed policy back in focus and inflation fears easing, the coming weeks could offer a fresh window for upward momentum in the crypto space — especially if economic data supports the case for lower rates.
