Rate-Cut Hopes Boost Bitcoin’s Fourth Wave Rally and ETH Inflows
August’s crypto market navigated a “arch”-shaped pattern as US inflation data (CPI, PPI) and cooling employment figures repeatedly shook rate-cut expectations. Bitcoin (BTC) fell 6.5% to $108,248, while ethereum (ETH) climbed 18.8% to $4,392. Total inflows reached $27.78 billion, but BTC drew only $0.33 billion (net outflow of $1.176 billion from BTC ETFs) as capital rotated into ETH, which saw a record $10.8 billion in spot ETF and corporate purchases.
Whale selling triggered a third wave of BTC profit-taking—over 150,000 coins moved out of long-term holdings—pushing prices back into the $90,000–$110,000 “Trump zone.” ETH’s strong inflows reflect consensus growth, low prior highs, and speculators eyeing the next altseason. EMC Labs forecasts that once Fed rate cuts resume, bitcoin will enter a fourth major uptrend, while ethereum remains in mid-cycle price discovery with room to run.
Bullish
Historical data shows that Fed rate cuts typically lift risk assets, and bitcoin has led these rallies in past easing cycles. August’s sharp fund rotation from BTC to ETH reflects Ethereum’s stronger mid-cycle momentum but also lightens near-term BTC liquidity. Once rate-cut expectations materialize—and barring major macro shocks—long-term investors are likely to bid BTC back above $120,000, marking the start of its fourth wave. In the short term, traders should watch US data releases for volatility triggers, but the medium-term outlook remains bullish as capital returns to bitcoin’s blue-chip status and altcoins rally around Ethereum. Against similar pre-easing environments in 2020 and 2023, BTC outperformed following the first 25 bp cut, suggesting a repeat performance.