Crypto Market Rebounds Ahead of Fed Rate Decision

The cryptocurrency market rebounded after two days of losses as investors await the Federal Open Market Committee's (FOMC) interest rate decision later today.

Bitcoin (BTC) rose 3.5% over the past 24 hours to $84,177, while Ethereum (ETH) surged 7.5% to $2,017.

XRP jumped 13% to $2.53 after news broke that the SEC would drop its appeal in its lawsuit against the project, while Solana (SOL) climbed 7% to $131. As a result, the total cryptocurrency market cap increased by 2.3% over the past 24 hours, reaching $2.88 trillion, according to CoinGecko.

During the same period, 87,085 traders were liquidated for a total of $217 million. ETH led the liquidations at $72 million, followed by BTC at $39 million, while XRP accounted for approximately $22 million.

Market analysts attribute the rebound to growing investor optimism that the Federal Reserve will loosen monetary policy in the months ahead.

Institutional Activity

Additionally, strong buying activity from institutional investors may have played a role in the price recovery. According to SoSoValue data, Bitcoin (BTC) exchange-traded funds (ETFs) have recorded approximately $500 million in inflows so far this week, marking a reversal after a weeks-long streak of outflows.

“Institutional adoption is still moving at lightspeed, and U.S. regulations are opening up,” said Jonathan de Wet, Chief Investment Officer at Zerocap.

He pointed to the Singapore Exchange’s plans to list Bitcoin perpetual futures in the second half of 2025, targeting institutional clients and professional investors, and BlackRock’s decision to integrate its Bitcoin ETF (IBIT) into its model portfolios with a 1-2% allocation.

“The U.S. House voted to overturn the IRS DeFi Broker Rule, indicating a more favorable regulatory environment for DeFi,” de Wet added. “Additionally, reports have surfaced that the SEC is considering classifying XRP as a commodity, which would mark a significant shift in the regulator’s stance.”

FOMC

The FOMC, the Federal Reserve's policy-making body responsible for setting interest rates, is set to announce its next decision today at 2 pm Eastern Time (ET).

Analysts expect the Fed to keep rates unchanged while signaling the possibility of one or two cuts later this year.

Moreover, investors will pay close attention to Chairman Jerome Powell’s remarks for insights into the Fed’s stance on tariffs. U.S. President Donald Trump has unnerved investors by announcing tariffs on Mexico, Canada, and China and promising escalation if the administration’s demands are not met.