Fed eases as crypto markets squeeze higher

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Introduction

After weeks of anticipation, the U.S. Federal Reserve delivered a 25 bps rate cut. The move had been priced in by falling bond yields, but the Fed’s cautious tone tempered optimism. Softer job numbers and producer prices, alongside stronger retail sales, framed the decision as measured rather than aggressive.

In Europe, the ECB left policy unchanged while trimming its inflation outlook. Asia offered mixed signals, with China battling deflation and Japan showing firmer wholesale inflation even as consumer prices eased. In Australia, sentiment softened but business conditions improved, keeping the RBA on hold.

Crypto flows stayed supportive. Bitcoin ETFs attracted steady inflows, Ethereum products held net positive, and BTC dominance slipped to 57%, highlighting a balance between Bitcoin leadership and selective altcoin rotation.

Check prices on the BTC Markets exchange.

State of crypto

• Bitcoin extends above US$117K as ETFs addnearly US$1B in weekly inflows
• Ethereum maintains footing above US$4.3K with modest but positive ETF support
• Solana consolidates above US$220, boosted by rising TVL and ecosystem activity
• XRP retests the US$3.00 level as momentum softens after recent gains
• Alt rotation lifts Dogecoin and HYPE hits a record high as market cap steadies near US$3.9T

Bitcoin extends support above US$114K as ETFs add nearly US$1B in weekly inflows

Bitcoin pushed above US$117K and after consolidating in a narrow range and ETF inflows reached nearly US$1B for the week. On the 4-hour chart, short EMAs stayed above the 200-period MA at US$113,100, and RSI in the mid-50s showed balanced momentum.

Liquidation clusters concentrated near US$118K and just below US$115K, which kept price pinned between two liquidity pockets. A breakout above US$118K–120K could trigger a short squeeze, while a drop under US$115K could push Bitcoin toward US$113K.

On the daily timeframe, Bitcoin traded above the 50-Day MA at US$114,300 and well above the 200-Day MA at US$103K. Resistance stood at US$118K–120K and US$123K–125K, while support held at US$114K–115K and US$108K–110K.

ETF flows strengthened sentiment. Bitcoin once again outpaced Ethereum, and cumulative ETF holdings rose to US$55–57B, confirming BTC’s role as the core institutional allocation.

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Ethereum maintains footing above US$4.3K with modest but positive ETF support

Ethereum traded steadily between US$4,200–4,400, showing resilience after the recent FOMC rate cut. On the 4-hour chart, ETH traded near US$4,500 with the 50-period MA at US$4,510 and the 200-period MA at US$4,440. RSI sat in the high-50s and showed signs of recovery after the FOMC rate cut.

On the daily timeframe, ETH stayed in an uptrend above the 50-Day MA at US$4,290 and well above the 200-Day MA at US$2,840. RSI in the mid-50s signalled orderly momentum. Resistance stood at US$4,700–4,900, while first support appeared at US$4,300–4,350 and deeper support at US$4,000–4,100.

ETF flows provided modest support. Weekly net inflows reached US$318M, smaller than Bitcoin’s but consistent with gradual institutional rotation.

Check ETH

Solana consolidates above US$220, boosted by rising TVL and ecosystem activity

Solana showed strength above US$220, supported by rising activity across its ecosystem. On the 4-hour chart, SOL traded near US$235, with short EMAs trending higher and RSI in the mid-60s. Dips toward the rising 50-period MA continued to find buyers.

On the daily timeframe, Solana held well above the 50-Day MA at US$197 and the 200-Day MA at US$162. Price action has formed higher lows since July, with US$197 acting as a key pivot. Additional support appeared at US$171–180 and US$135–147, while resistance stood at US$250–260 and US$280.

Narratives continued to support sentiment, including speculation around a Solana ETF, corporate treasury adoption estimated at US$4B, and momentum in meme coin markets. Broader risk appetite and Bitcoin’s direction remained key drivers.

Check SOL

XRP retests the US$3.00 level as momentum softens after recent gains

XRP moved in a choppy range near US$3.00, pausing after recent gains. On the 4-hour chart, XRP hovered around US$3.01, with the 200-period MA at US$2.95 acting as support. Short EMAs edged higher, and RSI approached 60, signalling modest positive momentum. Resistance sat at US$3.05–3.10, with support at US$2.85–2.90.

On the daily timeframe, XRP remained above the 50-Day MA at US$3.00 and the 200-Day MA at US$2.52, keeping the broader trend constructive. RSI in the low-50s reflected neutral momentum.

Speculation around potential US spot XRP ETFs added a premium, but liquidity and positioning around Bitcoin levels continued to guide direction.

Check XRP

Alt rotation lifts Dogecoin and HYPE as market cap steadies near US$3.9T

The global crypto market cap held near US$3.9T, reflecting steady but selective capital flows. Daily volumes stayed close to US$150B, supporting the recovery from late-August lows of US$3.75T. Bitcoin dominance remained around 57–58%, underscoring its anchor role while capital rotated into a handful of large-cap altcoins.

Within majors, Dogecoin climbed 10% on anticipation of an imminent ETF, while Hyperliquid (HYPE) set a record high on strong user growth. Avalanche (AVAX) also advanced 12.7% after the Avalanche Foundation announced plans to raise US$1B from institutional investors. In contrast, Chainlink (LINK) and others saw mid-week pullbacks, showing uneven sentiment across the sector.

Altcoin moves reinforced the market’s selective tone, with leadership concentrated in a few standout names.

Check AVAX

Check LINK

Crypto Fear & Greed Index

Source: Fear & Greed Index

BTC Markets in the news

Ausbiz: US rate cut "... rocket fuel for risk"

Rachael Lucas, crypto analyst at BTC Markets, highlighted digital assets’ sensitivity to US Federal Reserve rate decisions, with particular focus on Bitcoin. Lucas noted that when the Fed cuts rates, it typically lowers the cost of capital, encouraging investors to exit low yield assets in favour of higher beta opportunities like Bitcoin.

According to Lucas, Bitcoin has historically responded positively in reflationary environments spurred on by increased liquidity and a weakening US dollar, drawing a strong parallel to gold.

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The [DA] Top 50 Impact List

BTC Markets is proud to support the [DA] Top 50 Impact List, a trusted reference point for leadership and influence across Australia’s digital asset sector. The 2025 List will be revealed on 9 October in Sydney.

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The week ahead: Economic events

Thursday, September 18th 

• United States Fed Funds Interest Rate
• United Kingdom Interest Rate 

Friday, September 19th

• Japan Inflation Rate
• Japan Interest Rate
• United Kingdom Retail Sales MoM

Tuesday, September 23rd

• Germany Manufacturing PMI
• United Kingdom Manufacturing PMI
• United Kingdom Services PMI

Wednesday, September 24th

• Germany Ifo Business Climate Index

Source: Trading Economics

Market reflections

• United States: Fed cuts rates by 25 bps as growth cools and labour market weakens
• Eurozone: Inflation steady at 2% while ECB holds policy and trims forecasts
• China: Deflation persists with CPI –0.4% and PPI –2.9% year on year
• Japan: Wholesale inflation edges up, consumer CPI eases to 3.1%
• Australia: Consumer sentiment falls 3.1% despite resilient labour market

United States: Fed cuts rates by 25 bps as growth cools and labour market weakens

The Federal Open Market Committee (FOMC) reduced the federal funds target range from 4.25%–4.50% to 4.00%–4.25%, the lowest since 2022. The statement acknowledged easing headline inflation but emphasised that core inflation remains elevated. Growth was described as modest, while the labour market showed signs of strain with slower job gains and rising unemployment.

The Fed said monetary policy remains restrictive but now sees risks more evenly balanced between persistent inflation and slowing growth. Officials highlighted that there is no preset path for rates, and decisions will depend on incoming data. Markets expect political neutrality from the Fed, but tensions with the US administration have created uncertainty, adding to investor caution.

For investors, the rate cut signals a gradual shift toward easier financial conditions. However, tariffs and legal disputes around their enforcement cast a shadow as the retail sector enters peak season. For crypto, lower yields and a weaker dollar generally increase Bitcoin’s appeal as an alternative asset. Still, volatility may persist as traders weigh the Fed’s next moves and the broader political backdrop.

Eurozone: Inflation steady at 2% while ECB holds policy and trims forecasts

Headline inflation held at 2% year on year, and core eased to 2.3%. The ECB left policy unchanged and lowered long-term inflation forecasts.

For crypto, this reduces near-term hawkish risks, but weak sentiment continues to limit European risk appetite.

China: Deflation persists with CPI –0.4% and PPI –2.9% year on year

Deflation remained the key theme as consumer and producer prices fell. Exports rose 4.4% and imports 1.3%, while property sector weakness continued.

For crypto, China’s slowdown acts as a drag on global liquidity and risk sentiment.

Japan: Wholesale inflation edges up, consumer CPI eases to 3.1%

Wholesale inflation rose 2.7%, while consumer CPI cooled to 3.1%. The Bank of Japan is expected to hold its policy rate at 0.5%, with any policy shift likely to be gradual.

Australia: Consumer sentiment falls 3.1% despite resilient labour market

Consumer sentiment dropped to 95.4, while business conditions improved to +7. Input cost growth slowed to its weakest pace since 2021. The labour market remained resilient, with 24,500 jobs added and unemployment at 4.2%. The RBA has already delivered three cuts this year and is expected to remain patient.

Why this matters for crypto

Global conditions look risk-friendly but uneven. Softer yields and a weaker dollar support Bitcoin and large-cap crypto, while sticky inflation, weak European sentiment, and China’s deflation caution against aggressive positioning. ETF inflows remain the anchor: as long as they stay positive, dips in Bitcoin are likely to find support.

Closing thoughts: Policy easing supports sentiment, but risks remain uneven

This week showed how global policy remains the key driver of crypto sentiment. The Fed’s rate cut added momentum to Bitcoin and large-cap assets, while data from Europe, China, and Australia highlighted persistent growth challenges.

ETF flows continue to anchor support, with Bitcoin leading allocations. Selective strength in Solana, Dogecoin, and HYPE underscored that altcoin performance remains narrow.

For now, consolidation looks set to continue. Liquidity pockets and shifting macro signals may keep markets choppy, but steady institutional flows and product development leave crypto well positioned for longer-term gains.

Scam alert

Investment scams: Don’t let fake deals drain your savings

Investment scams promise big returns but are designed to steal your money. Australians lose more to investment scams than any other type of scam, and they can be hard to spot.

Scammers impersonate legitimate companies, use slick marketing, and apply pressure tactics to make you act fast. They may create fake websites, news stories, or data to make you believe your investment is real. In some cases, you can withdraw a small amount at first. But when you try to access all your funds, the money disappears.

Warning signs

• Fake news stories or ads claiming a celebrity endorses the scheme.
• Online contacts, including friends or romantic interests, suddenly pushing you to invest.
• Websites, emails, or ads with glowing testimonials and promises of high returns.
• High-pressure tactics urging you to act quickly so you don’t “miss out.”
• Advisers who claim they don’t need an Australian Financial Services (AFS) licence.

How to stay safe

• Take your time. Avoid rushing into any investment.
• Check ASIC’s Moneysmart investor alert list and the International Organization of Securities Commissions (IOSCO) alerts portal.
• Verify company details and contact information through official sources.
• Only deal with advisers who hold an AFS licence.
• Be cautious of pre-IPO offers or investments that seem “too good.”
• Check when a company’s website domain was registered. Be wary of new sites.

Report scams and find more advice at scamwatch.gov.au.

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