Crypto markets recorded upward price actions over the weekend as Bitcoin (BTC) extended its rally, tapping $116,800 on Saturday for the first time in nearly three weeks.
The world’s largest cryptocurrency has now gained 5% over the past four days, fueled by growing expectations that the Federal Reserve will cut interest rates this week.
BTC’s surge began on Thursday when the US CPI data was released, briefly triggering volatility before bulls regained control on Friday morning. The asset has now shot up to $116,400, marking its highest level since late August. After a brief pullback, the momentum continued, and Bitcoin set a fresh multi-week peak of $116,800 before easing back to around $116,000 at press time.
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Bitcoin’s market capitalization has now reclaimed the $2.3 trillion mark, though its dominance over altcoins has slipped to 55.2%, according to CoinGecko, as traders flock to high-growth tokens.
While traditional markets are hitting all-time highs, Arthur Hayes reminds investors that Bitcoin has been the best-performing asset against currency debasement in history.
He pushed back on short-term thinking in crypto. “If you thought that you were going to buy Bitcoin and next day you were buying a Lamborghini, you’re probably getting liquidated because it’s just not the right way to think about things,” he said. “Anyone who bought it two, three, five, or ten years ago is laughing,” he added, noting that long-term holders aren’t stressing over sideways moves.
All Eyes on the Fed
The next big catalyst arrives Wednesday, when Fed Chair Jerome Powell will announce whether the central bank will lower interest rates. Many expect a 25 basis-point cut while some are even betting on a 50-point “jumbo cut.” Lower borrowing costs typically benefit risk assets like Bitcoin. Cheaper money tends to boost liquidity, encouraging investors to deploy cash into high-risk, high-reward plays. This same dynamic often lifts tech stocks and other growth sectors.
Altcoins Shine Brighter
While Bitcoin has led the charge, altcoins are stealing the spotlight with even bigger gains: Ethereum (ETH) is up 5% in the past 24 hours, now hovering near $4,800, with traders eyeing the $5,000 milestone. It has gained 10% over the week.
Solana (SOL) has surged 20% this week, climbing to $250, putting it just $40 shy of setting a new all-time high. Dogecoin (DOGE) has rocketed 40% in seven days, while XRP has jumped 13% over the same period.
Despite recent gains and market indicators that signal the altseason may soon begin, investors could be looking at a rather short-lived euphoria. Notably, these altcoins’ outperformances have drawn significant interest from derivative traders, leading to a corresponding rise in open interest the total number of outstanding derivative contracts.
Renowned crypto analyst Ted Pillows states that general altcoin open interest (excluding Ethereum) is about to surpass Bitcoin open interest for the first time in nine months. While this development suggests an emerging altseason as capital and traders’ attention shift to the altcoin market, Pillows has highlighted a potential cause for concern.
In other news, Dutch crypto analyst Michaël Van De Poppe has admonished investors to prepare for the biggest altcoin run ever. Interestingly, Van de Poppe references an ongoing consolidation in the Gold market, which is expected to drive down interest rates.
Future Outlook
As the countdown to the Fed’s decision ticks away, traders are urged to stay cautious, set stop losses, and prepare for potential volatility. A surprise move from Powell could send crypto markets soaring or crashing in seconds.