Crypto Traders Shift Gears as Rate Cut Bets Gain Momentum

After a chaotic stretch driven by global trade tensions and sharp market swings, crypto investors are finding new footing — this time with their eyes firmly set on the U.S. Federal Reserve.

Rate Cuts in Focus

Markets are now confidently pricing in four rate cuts of 25 basis points each over the course of 2025 — expected in June, July, September, and December. For many traders, this potential monetary easing marks a shift from defense to opportunity.

Rate cuts, which make borrowing cheaper and reduce the appeal of traditional assets like bonds, often ignite interest in higher-risk, higher-reward assets — a category where Bitcoin and major altcoins thrive.

“The market narrative is clearly pivoting,” said analysts at QCP Capital in a Telegram broadcast. “If the labor market softens, the Fed may have no choice but to ease policy further.”

From Tariffs to Transfers

Earlier in the week, former President Donald Trump reignited trade war fears, announcing a 10% blanket tariff on all imports. That headline sparked immediate volatility. Leading up to the speech, major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL) surged — only to plunge soon after, mirroring losses across global markets.

On-chain metrics captured the panic. Over 2,500 BTC were transferred to exchanges in a single block. ETH inflows surged to 80,000 per hour, and XRP deposits to Binance hit 130 million in just one hour. These spikes suggested mounting sell pressure and a desire among investors to offload risk.

CryptoQuant data also highlighted a drop in demand for BTC and ETH perpetual futures, with traders scaling back long positions and securing profits during the downturn.

Calm After the Storm?

As of Friday morning, a recovery is underway. Bitcoin is holding above $83,100, ETH has reclaimed $1,800, and tokens like XRP, ADA, and SOL are up more than 2%.

QCP Capital noted that, while volatility remains elevated, market positioning is now relatively light. With many risk assets oversold and economic data on deck, conditions could be ripe for a near-term bounce.

Much of that optimism hinges on the upcoming non-farm payroll report, a key signal of U.S. economic strength. A weaker-than-expected jobs number would likely reinforce the case for Fed cuts — and potentially kickstart another leg up for crypto.

For now, the market is watching, waiting — and preparing for a shift in the winds.