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Bitcoin climbed toward $115,000 on Monday, extending its rally for a fourth consecutive day as traders positioned ahead of Wednesday’s Federal Reserve interest rate decision.
The cryptocurrency rose from around $108,000 over the past week, while the broader CoinDesk 20 Index gained approximately 2% in the last 24 hours, reflecting renewed appetite for digital assets amid growing expectations the Fed will cut rates.
The Fed rate cut narrative has encouraged rotation into risk assets, even as traditional markets signal rising caution over margin debt and leveraged trades. This cross-market divergence underscores how sentiment tied to the Fed rate cut continues to influence both crypto pricing and investor behavior.
Market optimism has strengthened in recent days as bitcoin extended a steady climb from $108,000 to near $115,000. The CoinDesk 20 Index posted a roughly 2% rise over the last 24 hours, reflecting broad support across major tokens.
Privacy coin ZEC, PI, and ENA saw double-digit advances, adding to the upbeat tone driven by expectations tied to the upcoming Fed rate cut announcement.
The price movement also highlights a familiar pattern of wealth rotation. Short-term traders and large institutional wallets have been accumulating coins from long-term holders who have gradually reduced exposure since bitcoin stabilized above $100,000 in June. This reshuffling suggests renewed confidence that a Fed rate cut could strengthen liquidity conditions and maintain support for digital asset prices.
Meanwhile, developments elsewhere in the market reflected shifting strategic positioning. Defunct exchange Mt. Gox extended its creditor repayment timeline to October 2026, providing temporary relief to bitcoin supply concerns.
In a notable acquisition, Sharplink Gaming purchased over 19,000 ETH, a transaction valued at more than $78 million — signaling strong confidence in Ethereum’s medium-term potential, particularly if a Fed rate cut eases broader financial conditions.
The momentum surrounding digital assets is not limited to speculative trading. Stablecoin initiatives are gaining traction across multiple markets, reflecting both institutional interest and growing experimentation with blockchain payment systems.
Western Union is reportedly exploring a stablecoin-based settlement model designed to reduce dependence on intermediary banking layers — an approach that could benefit from a Fed rate cut environment that encourages innovation in faster, lower-cost payment infrastructure.
In Asia, Japan’s JPYC Inc. officially issued its yen-pegged stablecoin, while Kyrgyzstan introduced a national stablecoin developed with support from Binance. These developments underscore how the stablecoin sector continues to evolve in parallel with macroeconomic shifts linked to the Fed rate cut outlook.
While crypto markets are rallying, traditional finance is showing signs of caution. Analysts note rising margin debt levels and heightened retail interest in leveraged ETFs — conditions that may amplify volatility if the Fed rate cut does not unfold as expected.
As Morningstar warned in a recent report:
“Adding fuel to the fire are worries investors are taking on risk beyond what the market’s fundamentals can support.” — Morningstar analysis
This concern has become more visible as investors balance expectations of improved liquidity from a Fed rate cut with the recognition that risk-taking is accelerating across sectors. The tension between optimism and overextension remains a key theme that crypto investors are closely monitoring.
Even with enthusiasm building around easing U.S.–China trade tensions, analysts argue that leveraged positioning could overshadow some of the benefits of a Fed rate cut, particularly for markets that have seen outsized gains over a short period.
The coming week is expected to deliver higher-than-usual price reaction across both crypto and equities as traders await formal guidance from the Federal Reserve.
Although bitcoin dominance has edged higher to around 59%, the rise in open interest across futures markets suggests capital inflows without excessive leverage, a more measured setup should the Fed rate cut align with investor expectations.
However, if the central bank delays or tempers its approach, crypto markets could see sharp pullbacks, given the extent to which the Fed rate cut has already been priced into sentiment.
For now, the trend favors strength — but caution remains warranted.
