Introduction to the Current State of Crypto
Bitcoin cools after summer highs while altcoins flicker and investors eye Fed policy. Is crypto preparing for another rally or deeper retreat? The crypto market has been experiencing a quieter phase after a record-breaking summer rally. In mid-August, Bitcoin touched an all-time high near $124,000, before profit-taking began to weigh on prices.
Bitcoin’s Current Trend
Since then, it has pulled back by about 10%, with trading largely confined to the $110,000 to $112,000 range. As of Sep. 8, Bitcoin held near $112,000, up around 0.7% in the past 24 hours and steady ahead of major macroeconomic events. This cooling momentum has not discouraged large buyers, with institutions continuing to show interest in the cryptocurrency.
Institutional Investment in Bitcoin
On Monday, MicroStrategy disclosed that it had added another 1,955 BTC for $217 million, bringing its total to 638,460 BTC. Around the same time, Tokyo-based Metaplanet confirmed it purchased 136 BTC for roughly $15.2 million at an average price of $111,666 per coin. The firm now holds 20,136 BTC, acquired for $2.08 billion at an average cost of $103,196. These investments demonstrate the ongoing confidence of institutions in Bitcoin’s potential.
Ethereum and Altcoins
Other parts of the crypto market have been more muted. Ethereum, which reached an all-time high of $4,953 on Aug 25, has been trading between $4,240 and $4,480 over the past week. At around $4,300 today, the second-largest crypto is down about 13% from its peak, showing less momentum than Bitcoin in recent weeks. The broader altcoin market is largely reflecting Ethereum’s restrained trading pattern, though some tokens have shown bursts of volatility.
Altcoin Market Trends
The overall market cap has edged higher by about half a percent in the past 24 hours, reaching roughly $3.94 trillion. Most large-cap tokens remain clustered near flat levels, with Solana and Ripple both up around 4–5% in the last 24 hours, alongside Bitcoin. XRP has been one of the more closely watched tokens, fueled by speculation about a potential exchange-traded fund tied to it. Several asset managers have filed applications, and prediction markets currently estimate the probability of approval before October at over 90%.
Speculation and Volatility
The speculation briefly pushed XRP above $3 before it slipped back toward $2.94. Elsewhere, individual coins have posted mixed results. Dogecoin advanced about 7% on Monday to $0.23, while Hyperliquid rose roughly 8% to trade around $50.6. Worldcoin, which promotes an identity verification system, gained more than 20% as reports mentioned a pickup in new sign-ups, extending momentum in tokens linked to artificial intelligence themes.
Market Sentiment
In contrast, World Liberty Financial, a recently launched project with ties to the Trump family, has faced turbulence. More than 270 wallets were blacklisted following concerns over manipulation and token dumping, with actions also affecting the holdings of Tron founder Justin Sun. WLFI has been one of the most volatile names among major tokens, declining more than 31% over the past week to around $0.215. Overall sentiment across the market has been broadly neutral, as reflected in the Fear and Greed Index reading near 42 out of 100.
Fragile Macro Sentiment
The broader economic environment will play an important role in shaping sentiment across crypto in September. In the U.S., the latest labor market data showed signs of cooling, with the unemployment rate climbing to its highest level since 2021 and job creation slowing noticeably. Those trends have strengthened expectations that the Federal Reserve will begin easing monetary policy at its mid-September meeting on Sep. 17.
Fed Policy Expectations
According to the CME FedWatch Tool, around 90% of market participants are expecting a 25 basis point rate cut, while about 10% are even considering a 50 basis point move. A half-point cut remains a low-probability outcome, but it would carry far greater implications if delivered. Such a move would mark the first cut of 2025 after a year of steady rates, while central banks in Europe and the United Kingdom have already lowered borrowing costs multiple times.
Impact on Crypto
The possibility of looser U.S. monetary policy could boost confidence in risk assets, including crypto, as easier financial conditions generally encourage investment flows. Past data suggest that a modest rate cut could support crypto sentiment by improving liquidity, although an overly sharp move might raise concerns about a weakening economy. Equity markets have also reflected this uncertainty, with major U.S. indices opening September with steep losses on worries over tariffs and interest rates, only to rebound as bargain hunters stepped in.
Conclusion and Outlook
With inflation running in the 2.7% to 3% range and new consumer price data due soon, markets remain cautiously optimistic that the Fed can start cutting rates without sparking renewed inflationary pressures. The combination of slower growth, easing inflation, and the likelihood of lower borrowing costs could create a supportive backdrop for Bitcoin and other digital assets in the coming weeks. However, not all bets are aligned with the upside, and large traders are still positioning against Bitcoin. Amid this, macroeconomic sentiment remains fragile, shaped by tariff uncertainty and elevated jobless claims. If the environment turns less favorable, crypto markets are likely to get caught in the crossfire. As always, trade wisely and never invest more than you can afford to lose. For the latest updates and news, visit bitpulse.