The Federal Reserve’s first rate cut since 2024 jolted global markets Thursday — and in crypto, Bitcoin’s rare “death cross” has traders bracing for an explosive altcoin rally.
Fed Cuts the Interest Rates
The U.S. central bank lowered its benchmark federal funds rate by 25 basis points to a range of 4.00%–4.25%. It was the first cut in nearly a year, but smaller than the 0.5% move many analysts and investors had hoped for. Policymakers projected two more cuts in 2025, signaling a cautious easing path.
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The decision comes as the labor market shows signs of strain, while inflation remains stubbornly above the Fed’s 2% target.
Markets Jolt, Then Rebound
Stocks and crypto swung immediately after Chair Jerome Powell’s remarks, as traders reassessed the outlook for inflation and interest rates.
Dow Jones rose modestly, while the S&P 500 and Nasdaq closed lower.
Bitcoin (BTC) briefly slipped below $115,000 before rebounding to nearly $118,000 within 24 hours. Ethereum (ETH) revisited $4,600 highs, while other leading cryptos also posted gains.
Avalanche (AVAX) and Hyperliquid (HYPE) turbo were the top performers, climbing 10.3% (to $33) and 8.4% (to $59.4), respectively, after Powell’s speech.
As of Thursday morning, the total crypto market cap had grown just 1% in 24 hours, reaching $4.1 trillion. Despite a neutral Fear & Greed Index reading (51), the Altcoin Season Index has surged to 71. Bitcoin dominance stands at 55.7%.
Bitcoin Dominance Forms Death Cross
The crypto community has framed the Fed’s rate cut as a “starting gun” for altseason.
Capital won’t stay in bonds, as investors look for faster upside. “The first impulse always goes into BTC and that’s exactly what we’re seeing now,” wrote trader @0xPepesso.
He added that liquidity usually shifts to Ethereum next, before spilling into altcoins during the cycle’s most volatile phase.
In 2021, altseason lasted just over a month and is expected to be even shorter in 2025.
“But within weeks, most coins dropped 60–80%. Those who waited for ‘a bit more’ were left empty-handed,” trader states.
Beyond price swings, a rare technical signal is fueling crypto chatter: a rare Death Cross formation appeared on the Bitcoin dominance chart (BTC.D) on a two-week timeframe. The bearish formation typically suggests that Bitcoin’s market share is trending weaker relative to altcoins.
According to crypto trader @AltcoinGordon, since 2016, this death cross has preceded every major altseason.
If history repeats, the Fed’s cautious cut could mark the opening bell for crypto’s wildest and most dangerous rally of the bull market.
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People Also Ask:
A rate cut means the U.S. Federal Reserve lowers its benchmark interest rate to make borrowing cheaper. The goal is to stimulate economic growth, especially when signs of slowdown or weak job markets appear.
Lower rates generally boost risk assets like stocks and crypto because investors seek higher returns outside of bonds. However, rate cuts can also spark volatility if markets think the Fed is moving too cautiously or too aggressively.
Not directly, but they influence investor sentiment. Cheaper money often fuels demand for speculative assets like Bitcoin and altcoins, especially if inflation stays elevated.
Bitcoin dominance measures BTC’s share of the total crypto market cap. When this metric drops sharply—often after a “death cross”—altcoins tend to rally as liquidity rotates into them.
Past altseasons have lasted only weeks to a few months. In 2021, many altcoins skyrocketed before crashing 60–80% shortly after. Traders warn 2025’s altseason could be even shorter.
