Global markets are holding their breath. This Wednesday evening at 8 PM, the US Federal Reserve is set to announce a new cut in its key interest rates, estimated at 25 basis points. Nothing surprising in itself: Wall Street and crypto investors had widely anticipated it. But the real suspense will unfold a few minutes later, during Jerome Powell’s press conference.
Fed Rate Cut: An Expected Yet Significant Decision
If the Fed confirms a target rate between 4.00% and 4.25%, it will be an additional signal of monetary easing. For traditional markets, this means support for risky assets. For crypto, it’s a test of confidence: Bitcoin remains stuck around $116,000, unable to initiate a real breakout. Altcoins slightly benefit from this calm, causing BTC dominance to fall to 58%.
This rate cut is just a step. Investors are now expecting six cuts by the end of 2026: three this year, three next year. A delicate balance, described by some analysts as a scenario of ‘neither too hot, nor too cold’.
The Trap of the Dot Plot
The danger for the markets? That the famous ‘dot plot’ of the Fed, the rate projections by its members, contradicts this scenario. A more cautious trajectory, even restrictive, would force investors to reassess all their bets. Bonds, stocks, and especially cryptos, could find themselves caught in a new episode of volatility.
Powell knows he’s playing a big hand: a measured tone could reignite the rally of risky assets. Conversely, the slightest hint of hesitation would be enough to cool the market.
Crypto: Contrasting Signals
Flows remain strong. Bitcoin spot ETFs attracted around $550 million this week, while Ethereum ETFs exceed $300 million. On the derivatives side, open interest on BTC futures rises to $32 billion, evidence of increased activity. However, the premium on three-month contracts narrows to around 6 to 7%, indicating a slight weakening of bullish conviction.
In options, the picture is blurred: traders are paying premiums to protect themselves in the short term, but recent volumes show more bullish than bearish positions. A market schizophrenia reflecting nervous anticipation before Powell’s speech.
A Turning Point to Watch
Beyond the numbers, it’s the Fed president’s tone that will guide the way forward. A balanced message would strengthen confidence in a ‘controlled’ easing cycle, giving cryptos breathing room after weeks of range-bound trading. But ill-calibrated words could trigger an immediate shockwave.
At 8 PM, the decision. At 8:30 PM, Powell’s verdict. And for Bitcoin as well as Wall Street, it’s this second appointment that will truly matter.
