Crypto Faces FOMC Test: Bitcoin, ETH, SOL In Focus
Crypto Market Rebounds Ahead Of Key FOMC Decision
Last week, the cryptocurrency market saw significant gains. By 4:00 PM UTC on Sunday, Bitcoin rose nearly 4.8%, Ethereum climbed 7.7%, and Solana led the pack with a remarkable 22% rally. The main driver behind this surge was growing expectations of a U.S. interest rate cut, especially after the release of August’s nonfarm payrolls report on September 5.
Markets have now priced in a 0.75 percentage point cut by the end of 2025 and an additional 1.5 percentage points by September next year. Still, with inflation holding around 3%—well above the Fed’s 2% target—the central bank has been cautious about easing too aggressively.
The optimism was further fueled by inflation data. The August Producer Price Index (PPI) fell 0.1%, compared with expectations of a 0.3% rise, marking the first decline in four months. Meanwhile, the Consumer Price Index (CPI) matched forecasts, showing inflation’s pace wasn’t accelerating. This combination pushed Bitcoin back to $115,000 for the first time in two weeks, sparking optimism across the crypto space.
Ethereum And Solana Take The Spotlight
Ethereum started the week relatively muted, but by Tuesday, spot ETH ETF inflows turned slightly positive. Momentum built after Thursday’s CPI report, with ETH jumping over 8% in just two days. Friday alone saw more than $400 million flow into ETH spot ETFs, reversing a two-week slump.
Solana, which had struggled for months to break past the $210 level, surged for eight consecutive days. Futures open interest surpassed $8.1 billion even before the CPI release, underscoring the strength of the rally. The DeFi ecosystem on Solana also benefited, with total value locked (TVL) exceeding $13 billion amid renewed activity.
Looking Ahead: Powell’s Words Hold The Key
After a strong weekend rally, Bitcoin has slightly cooled to around $115,000, with ETH, SOL, and AVAX also showing small pullbacks. The critical event this week is the Federal Open Market Committee (FOMC) meeting on Wednesday at 6:00 PM UTC. While a 0.25 percentage point cut is almost certain, all eyes will be on Fed Chair Jerome Powell’s press conference. Any hint of willingness to pursue additional cuts could send Bitcoin higher.
Other key data include U.S. retail sales numbers on Tuesday. A weak reading could stoke recession fears, potentially weighing on risk assets such as cryptocurrencies. Traders and investors are bracing for a pivotal week that could determine whether the crypto rally continues or stalls.
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