TL;DR

  • Bitcoin, XRP, and Solana rose at least 2% Tuesday, with Solana up over 7% weekly.
  • Market optimism driven by expected Federal Reserve rate cut in September 2025.
  • U.S. dollar weakening boosted risk appetite and capital flows into crypto.
  • Metaplanet acquired 1,009 BTC, signaling strong conviction amid rising open interest.
  • Analysts warn possible volatility if Fed delivers hawkish messaging despite rate cuts.

Cryptocurrencies including Bitcoin, XRP, and Solana experienced notable gains on Tuesday morning, reversing a downtrend seen since mid-August. This rebound is largely attributed to growing market expectations of an upcoming Federal Reserve rate cut and a weakening U.S. dollar, which has encouraged investors to take on more risk and move capital into crypto assets.

Since mid-August, the crypto market has struggled with downward pressure amid broader economic uncertainties. However, recent macroeconomic signals and on-chain data have contributed to renewed optimism. According to CoinGecko, Bitcoin, XRP, and Solana each posted gains of at least 2% on Tuesday, with Bitcoin climbing back above $111,000 for the first time since the previous Friday. Solana outperformed with a weekly gain exceeding 7%, while other major coins like Ethereum, Dogecoin, and Binance Coin remained slightly down.

Experts highlight several factors behind the uptick. Ryan Lee, chief analyst at Bitget, noted that the depreciation of the U.S. dollar has bolstered risk-on sentiment, encouraging capital flows into cryptocurrencies. Additionally, markets are increasingly pricing in a Federal Reserve rate cut expected in September 2025, which lowers the opportunity cost of holding non-yielding assets such as Bitcoin and other cryptocurrencies. Supporting this bullish outlook are declining Bitcoin exchange reserves, reduced BTC dominance, and accumulation of Ethereum by long-term holders.

On-chain metrics also indicate strengthening conviction. DarkFost, an analyst at CryptoQuant, pointed out that net taker volume has turned positive, signaling traders’ growing bias toward short-term upside. The overnight rise in Bitcoin’s open interest, crossing a negative threshold in the 7-day change, suggests liquidation of positions—a pattern historically followed by positive price reactions. Derek Lim, head of research at Caladan, emphasized that this increase in open interest reflects conviction-driven positioning rather than speculative excess. This is exemplified by Metaplanet’s recent purchase of 1,009 BTC on Monday, demonstrating data-backed confidence in the market.

The Federal Reserve’s upcoming rate decision on September 17 remains a pivotal event. The CME FedWatch tool currently assigns a 91.8% probability to a 25-basis-point rate cut. However, Lim cautions that this market optimism is largely based on reactive futures pricing rather than a full understanding of the Fed’s complex decision-making. The Nonfarm Payrolls report, due this Friday, will be a critical test of this outlook. If the report shows job growth within the 90,000 to 120,000 range, it would indicate a cooling labor market and likely confirm the rate cut, potentially driving Bitcoin prices higher.

Conversely, if job growth surpasses 150,000 or reveals tariff-driven wage pressures, the Fed might delay cuts or adopt a hawkish stance despite a rate reduction. This could cause Bitcoin to fall back to the $104,000-$106,000 range and trigger significant liquidations. Lim warns that the market may be overconfident, as the Fed could deliver hawkish messaging alongside a rate cut, increasing volatility for traders expecting a more dovish policy shift.

Market context shows that while Bitcoin’s weekly gain is modest at around 1%, Solana’s strong performance and the positive momentum in XRP highlight selective strength in the crypto sector. The weakening dollar and anticipation of looser monetary policy are key macro drivers supporting this trend.

Overall, the recent crypto market rebound reflects cautious optimism fueled by macroeconomic signals and on-chain data. However, traders should remain aware of potential volatility around key economic reports and Fed communications.

Takeaway: Bitcoin, XRP, and Solana’s recent gains underscore growing market optimism on Fed rate cuts and dollar weakness, but upcoming economic data could trigger volatility.

Sources: https://decrypt.co/337665/bitcoin-xrp-solana-bounce-back-heres-whats-going-on

See also: What is DeFi?

See also: How to store Bitcoin safely

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This article is a summarized news brief for informational purposes only. Not financial advice.

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