Crypto Majors Eye Bounce as Rate Cut Speculation Heats Up

Crypto Markets Stabilize as Traders Shift Focus to Fed Rate Cuts and Economic Data

After a volatile week fueled by geopolitical headlines and tariff shocks, crypto markets are beginning to find their footing. Traders are now turning their attention to anticipated interest rate cuts and key economic data, setting the stage for a potential short-term recovery in digital assets.

Rate Cut Bets Grow

According to market data, investors are now pricing in four 25 basis point rate cuts from the Federal Reserve throughout June, July, September, and December. Lower interest rates generally boost appetite for risk assets, including cryptocurrencies, as they reduce yields on traditional fixed-income instruments and encourage capital to flow into alternatives like Bitcoin.

Investor sentiment will hinge on Friday’s U.S. non-farm payroll report, a crucial gauge of labor market strength. “A softer print would increase the likelihood of additional Fed easing,” said Singapore-based QCP Capital, noting that the Fed may need to act to support slowing economic momentum.

Tariff Drama Triggers Sell-Off

Earlier in the week, former President Donald Trump’s announcement of a blanket 10% tariff on all imports triggered a sharp reversal across global and crypto markets. Major cryptocurrencies such as BTC, ETH, XRP, and SOL initially rallied ahead of the speech, only to retrace gains sharply after the announcement.

Exchange data showed a significant uptick in on-chain inflows, with Bitcoin seeing over 2,500 BTC moved to exchanges in a single block. Ethereum inflows surged to 80,000 ETH per hour, while XRP deposits into Binance spiked to 130 million—an indicator of heightened selling pressure.

Crypto analytics platform CryptoQuant noted a decline in demand for BTC and ETH in the perpetual futures market, as traders closed long positions and locked in profits amid rising uncertainty.

Signs of Recovery Emerge

Despite the turbulence, the market bounced back Friday morning. Bitcoin traded above $83,100, ETH regained the $1,800 mark, and tokens like XRP, SOL, and ADA rose over 2%.

“Volatility remains elevated, but with positioning lighter and markets oversold, conditions are favorable for a relief rally,” said QCP Capital. The firm also pointed out increased hedging activity as a sign that investors are still cautious in the near term.

Historically, rate cuts and a weakening dollar have been tailwinds for Bitcoin, which is often viewed as a hedge against fiat depreciation and macro uncertainty. With monetary easing back in focus, crypto could be entering a short-term window of opportunity.