Fed Rate Cut Hopes Fuel Altcoin Rally as Bitcoin Flat
Late Tuesday in US trade, Treasury Secretary Scott Bessent proposed a 50 basis point Fed rate cut in September. The announcement spurred a sharp altcoin rally across the crypto market. Investors had largely priced in a 25bp move. But the possibility of a 50bp Fed rate cut boosted risk assets. Ethereum led gains, jumping nearly 9% to above $4,600—a near five-year high. Cardano, Solana and Litecoin each gained about 8%, and XRP rose 3.5%. Bitcoin, by contrast, held near $120,000 as traders rotated capital into high-beta coins. The rally followed July US CPI data in line with estimates. Yet it was the Fed rate cut speculation that ignited speculative demand. A softer dollar and renewed bets on an accommodative Fed drove a surge in altcoin trading volumes. As Fed rate cut expectations peaked, the altcoin rally shows how rate policy fuels crypto volatility. Traders should watch evolving rate cues for near-term market shifts.
Bullish
Fed rate cut speculation has driven a strong altcoin rally, lifting Ethereum nearly 9% and boosting Cardano, Solana, Litecoin and XRP while Bitcoin remains flat. In the short term, traders are rotating into high-beta assets on renewed rate-cut bets, which fuels bullish momentum and higher trading volumes. Over the longer term, actual Fed decisions and economic data will dictate sustainability: a confirmed cut could extend the rally, whereas any Fed pushback may trigger profit-taking and volatility. Overall, rate-cut hopes underpin a bullish outlook for altcoins under current market conditions.