Crypto Experts Maintain Bullish Bitcoin Outlook Amid Fed Rate-Cut Hopes and Stagflation Concerns

Despite economic data pointing to potential stagflation in the U.S., cryptocurrency analysts remain optimistic on Bitcoin, focusing on anticipated Federal Reserve rate cuts and the long-term structural bull market for digital assets.

Recent data revealed a challenging economic backdrop: consumer prices rose 0.4% month-on-month in August, pushing the annualized inflation rate to 2.9%, the highest since January. Meanwhile, first-time unemployment claims surged to a four-year high, and the Bureau of Labor Statistics revised downward its jobs data for the year ended March 2025.

Yet, traditional markets have largely brushed off these worries. The S&P 500 reached record highs, and the dollar index fell 0.5% to 97.50 as traders focused on the likelihood of Fed rate cuts rather than inflation risks.

Bitcoin and Crypto Market Response
Bitcoin (BTC) briefly surpassed $116,000, building on a recent bullish technical breakout, and was trading around $115,244 at the time of writing. Altcoins, including Solana (SOL), Chainlink (LINK), and Dogecoin (DOGE), recorded larger 24-hour gains.

“The underlying driver of this cycle is a monetary tailwind, and it remains intact despite stagflation concerns,” said Shane Molidor, founder of crypto advisory platform Forgd. “Bitcoin and crypto more broadly are absorbing capital as a hedge against fiat dilution and fiscal instability, rather than purely as a risk-on asset like in previous cycles.”

Market participants widely expect the Fed to cut rates by 25 basis points to 4% on September 17, with further reductions likely by year-end. Traders remain confident that the Fed will prioritize supporting the labor market despite sticky inflation numbers.

Tech Stocks and Crypto Sentiment
Le Shi, managing director at crypto market maker Auros, noted that the so-called Magnificent 7 tech stocks, heavily invested in AI and R&D, appear insulated from stagflation fears. Their strength, Shi suggested, contributes to bullish crypto sentiment.

“Stagflation risks have not materially impacted the Mag 7 or the S&P 493,” Shi said. “The AI narrative, a major driver in this bull run, remains largely insulated from economic headwinds.”

Sam Gaer, chief investment officer at Monarq Asset Management, echoed the positive outlook. “Traders are essentially getting an ‘all clear’ for an upcoming rate cut,” he said. “Even in a stagflation scenario, any temporary market pullback would strengthen the long-term crypto bull case, as investors seek scarce, non-sovereign assets.”

Markus Thielen, founder of 10x Research, added that disinflation trends are expected to resume in the coming months, providing a supportive backdrop for risk assets. “A 25bp cut with guidance for more would calm markets and set the stage for a bullish year-end,” he said.

Altcoins Poised for Gains
Alongside Bitcoin, select altcoins are seeing strong momentum. Solana (SOL) has surged in recent weeks, with SOL/BTC reaching its highest level in seven months and testing key psychological levels. Over $1 billion has been raised into various SOL vehicles, driving rotation into the token.

Other notable altcoins include Ethena’s ENA and its synthetic dollar USDe, as well as Hyperliquid’s HYPE token. “Younger investors are seeking higher returns than traditional 7% annualized yields, turning to perpetuals and leveraged trading,” Molidor explained. “Hyperliquid is designed for this type of user, offering high-beta exposure in a permissionless, always-on environment.”

Ethena’s stablecoin yields also benefit from falling Fed rates, creating a rare environment where crypto-based yield products become more attractive as traditional yields decline.

Tokens to Watch
Auros highlighted CRO, SOL, BNB, and HYPE as key tokens to watch during the next upswing, driven by continued liquidity inflows, favorable macro conditions, and ongoing market rotation into high-demand altcoins.