What Bitcoin, Ethereum Traders Should Watch Ahead of Fed Rate Decision

Core Viewpoint - The U.S. central bank is expected to cut interest rates, but the future of quantitative tightening (QT) remains uncertain, which could impact crypto markets [1][4]. Group 1: Interest Rate and Quantitative Tightening - Analysts predict a 90% chance of a 25-basis point rate cut by the Federal Open Market Committee (FOMC) [5]. - Futures trading data indicates a 97.8% probability of a rate cut on Wednesday and an 89% chance of another cut in December [6]. - The end of QT would signal a higher tolerance for inflation, potentially leading to inflation expectations closer to 3% over the medium term [5]. Group 2: Impact on Crypto Markets - A cessation of QT could create a favorable environment for Bitcoin and other crypto assets, as it implies a higher tolerance for inflation [2][5]. - Bitcoin was trading flat at approximately $114,850, while Ethereum saw a slight decline of 2.2% in the past day but remained above $4,100, indicating that investors may have already priced in the anticipated rate cut [3]. - The current liquidity growth in the U.S. and globally is expected to extend the bull market into 2026, with a potential risk-on scenario for Bitcoin and crypto assets [7].