Bitcoin, XRP Extend Gains as Traders Brace for Fed Cut, BOJ Decision, and ‘Mag 7’ Earnings

Major cryptocurrencies advanced on Sunday as traders geared up for a high-stakes week featuring rate decisions from the U.S. Federal Reserve and the Bank of Japan, a packed earnings calendar from the so-called “Magnificent 7” tech giants, and renewed optimism around U.S.–China trade progress.

Fed Poised to Cut Rates

The Federal Reserve is widely expected to trim its benchmark rate by 25 basis points to 4% at Wednesday’s meeting — marking a total of 150 basis points in easing since September 2024.
According to CME FedWatch data, futures markets have fully priced in a 25-basis-point cut this week and another in December, with additional reductions anticipated in 2026.

Bitcoin (BTC) rose 1.7% over the past 24 hours to $113,600, extending a three-day winning streak. The move follows signs of seller exhaustion near its 200-day simple moving average (SMA) around $108,800, though the cryptocurrency has yet to clear its 50-day SMA at $114,250, a key resistance level that could confirm renewed short-term bullish momentum.

Other major tokens also gained, with XRP up 3% to $2.66, Ether (ETH) at $4,172, and Solana (SOL) near $200.35. Notably, XRP climbed back above its 200-day SMA at $2.60, signaling improving market sentiment.

Powell’s Focus: Labor Market Over Inflation

This week’s Fed decision will not include updated economic projections, placing greater weight on Chair Jerome Powell’s post-meeting remarks. Analysts expect Powell to reiterate concerns over rising job-market risks while maintaining that tariff-driven inflationary pressures remain temporary.

Powell is also likely to downplay the ongoing U.S. government shutdown, emphasizing that labor weakness predates it. September’s forecasts projected inflation at 3% in 2025 and 2.6% in 2026, alongside a gradual decline in unemployment from 4.5% in late 2025 to 4.3% by 2027.

Balance Sheet Shift: QT Nearing Its End

A key development could emerge from the Fed’s balance sheet management. Powell recently signaled that the central bank is nearing the point to end quantitative tightening (QT) — the balance sheet runoff that began in 2022.
“Our long-stated plan is to stop runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions,” Powell said earlier.

U.S. banking system reserves have now fallen below $3 trillion, a threshold widely seen as “ample,” suggesting tighter liquidity.
While ending QT wouldn’t immediately restart quantitative easing (QE), it could nonetheless buoy investor optimism — particularly across crypto markets that tend to respond positively to liquidity expansion signals.

BOJ and the Yen Outlook

The Bank of Japan is set to announce its policy decision on Thursday, with Governor Kazuo Ueda expected to hold rates steady. Still, updated economic and rate projections could spark market volatility.
“Markets are priced for no change this week, but a 50% probability of a quarter-point cut in December and a full cut priced by early 2026,” Scotiabank noted.

Earnings: Mag 7 in Focus

The week will also feature earnings from Apple, Meta, Alphabet, and Microsoft, among the “Magnificent 7” that have powered much of Wall Street’s post-pandemic rally. Traders will scrutinize these reports for signs of sustained investment in AI-related infrastructure and technology — a key driver of risk appetite since 2023. Any slowdown in AI spending could trigger renewed caution in both equity and crypto markets.

Geopolitical Relief: Trump–Xi Summit

Meanwhile, geopolitical sentiment improved after U.S. and Chinese officials announced progress in trade talks, with both sides nearing a deal.
The White House confirmed that President Donald Trump and President Xi Jinping will meet Thursday in South Korea on the sidelines of the APEC Summit.

The upbeat rhetoric ahead of the meeting has bolstered risk sentiment. However, analysts warn that any setback in talks could quickly trigger a risk-off reversal across global markets — including digital assets.