Fed Rate Cuts Incoming: Why Crypto Could Explode Higher

Have you ever noticed how the worst moments in markets often feel exactly like the moment right before everything flips?

Right now, crypto Twitter is doom-scrolling, headlines scream about the “end of the bull market,” and the Fear & Greed Index just printed a terrifying 12. I’ve been through enough cycles to know that when sentiment hits rock-bottom like this, something big usually brews underneath the surface. And this time, the spark might not come from another meme coin pump — it could come straight from the Federal Reserve.

The Fed Is Sending the Loudest Signal in Months

On Monday, Federal Reserve Governor Christopher Waller did something rare for a central banker: he basically stood up and said, “I want a rate cut next month.” Not “maybe,” not “data-dependent” in that usual guarded Fed-speak way. He outright said his main concern is the labor market and that he’s pushing for lower rates at the December meeting.

That’s huge.

Coming just days after New York Fed President John Williams also leaned dovish, the market’s probability of a December cut jumped to around 70% almost overnight. For context, two weeks ago a lot of traders were betting on “no cut until March.” The shift has been dramatic.

“My concern is mainly labor market… So I’m advocating for a rate cut at the next meeting.”

Christopher Waller, Federal Reserve Governor

Why This Matters More Than the Last Few Cuts

We’ve had rate cuts before this cycle — three of them, actually — but each one felt like the Fed was reluctantly tipping its hat to softer inflation data. This time feels different. Waller is openly prioritizing employment over inflation worries, which is exactly the kind of pivot risk assets dream about.

Add in the fact that quantitative tightening (QT) is widely expected to slow dramatically or even end early next year, and you have the recipe for fresh liquidity to flow back into stocks, real estate, gold… and yes, crypto.

History is remarkably consistent on this point: Bitcoin and the broader crypto market tend to absolutely thrive when real interest rates are falling and central bank balance sheets are expanding. We’re potentially on the cusp of both happening at the same time.

Current Price Action Is Already Hinting at a Turn

While Bitcoin spent the weekend sliding toward $85,000 and Ethereum dipped under $2,800 again, something interesting started happening Monday morning. Altcoins that had been bleeding for weeks suddenly woke up.

XRP pushed above $2.10 with real volume. Stellar flipped green in a sea of red candles. Even smaller names like Hedera quietly added half a percent while everything else chopped sideways. These aren’t massive moves yet, but they’re often the first cracks of light before a broader reversal.

When the majors are still heavy but certain alts start outperforming, it’s usually a sign that smart money is rotating early.

Extreme Fear Almost Always Marks the Bottom

I keep going back to the Fear & Greed Index because it’s one of the most reliable contrarian signals we have. A reading of 12 is not just low — it’s the lowest level all year. The last time we saw anything close was late 2022 when Bitcoin traded under $16,000 and literally nobody wanted to touch crypto.

We all know what happened next.

Extreme fear doesn’t guarantee an immediate V-shaped recovery, but it almost always shows up within weeks or months of major lows. Combine that with dovish Fed commentary and you start to understand why some of us are getting cautiously excited.

Whales Never Stopped Buying the Dip

Public companies and large investors have been remarkably consistent through this correction. Strategy (the company formerly known as MicroStrategy) now holds close to 650,000 BTC and keeps adding every week. Mining companies are stacking. Even some of the newer spot Bitcoin ETFs saw inflows last week while price fell.

In my experience, when the most convicted hands keep buying while retail capitulates, it,font face=”verdana”>that’s usually a very good sign.

“In the depths of the 2022 crypto winter, our average cost basis was $30K while BTC traded nearly 50% below it at $16K. What did we do? We bought more.”

Strategy executive team, Nov 21 2025

Leverage Is Washed Out — The Fuel for the Next Leg Up

One of the main reasons this correction felt so painful is the massive deleveraging we saw. Total crypto open interest collapsed from over $225 billion in September to roughly $123 billion now. That’s a 45% wipeout in leveraged positions.

But here’s the thing: every single major rally in crypto history started with open interest near multi-month lows. Once the weak hands are gone and funding rates reset, new money flows back in aggressively. We’re getting very close to that inflection point.

What Could Still Go Wrong?

Let’s be honest — not every Fed governor is on the same page. A couple of more hawkish voices have warned that inflation is still sticky and cutting too soon could reignite price pressures. If the December dot plot shows fewer cuts than expected in 2026, we could absolutely get another leg down.

Geopolitical flare-ups, regulatory surprises, or a nasty equity sell-off could also change the mood quickly. Risk assets don’t exist in a vacuum.

Still, the balance of probabilities has shifted meaningfully toward the bullish side over the past 72 hours.

The Bottom Line

We’ve got a Federal Reserve that sounds ready to ease again, sentiment at rock-bottom extremes, whales accumulating, leverage flushed, and technicals showing early signs of rotation. I’m not saying tomorrow we rip to new all-time highs — markets rarely work that cleanly — but the ingredients for a serious rally are falling into place faster than most people realize.

Sometimes the best trades are the ones that feel terrible right until they don’t. If you’ve been waiting for a signal to get back in or add to positions, this might just be it.

Stay sharp.