Rate cut whispers fuel Bitcoin, Ether bets

September 16, 2025

 

Reading time: 5 minutes

Fed shake-up and rate cut loom: Crypto braces for impact

Key points:

  • The Federal Reserve is expected to cut rates this week, with political battles around its independence amplifying uncertainty for crypto markets.

  • Traders eye liquidity shifts as experts forecast inflows into Bitcoin, Ether, Solana, and DeFi tokens.

News - Crypto markets are bracing for the Federal Reserve’s meeting on Wednesday, where policymakers are expected to announce the first rate cut of the year. Lower rates typically push investors toward riskier assets, setting the stage for renewed interest in crypto. But the backdrop this time is far from routine.

President Trump’s administration has sought to remove Fed governor Lisa Cook, accusing her of mortgage fraud, while simultaneously backing White House economic adviser Stephen Miran, now confirmed by the Senate as a Fed governor in a 48–47 vote.

Miran has expressed pro-crypto views, yet Democrats warn his dual role undermines the Fed’s independence. Appeals courts have temporarily blocked Cook’s removal, escalating the political standoff.

Why it matters for crypto - Analysts say a less independent Fed could make policy more volatile and more closely tied to political cycles. Aaron Brogan of Brogan Law noted that banks, under the Fed’s authority, indirectly shape access to crypto services. A politically driven Fed, he warned, could shift this influence in unpredictable ways.

Markets on edge - Kevin Rusher of RAAC said rate cuts could unlock trillions from money market funds and mortgage debt, redirecting capital toward DeFi and real-world asset protocols. CoinMarketCap’s Alice Liu added that high-beta tokens like Ether and Solana tend to outperform when liquidity improves.

Meanwhile, Fundstrat’s Tom Lee said Bitcoin and Ether could make a “monster move” in the next three months if easing continues, comparing Ethereum’s growth narrative to Wall Street’s innovation era of the 1970s.

Outlook - With the GENIUS Act and CLARITY Act already reshaping U.S. digital asset policy, a Fed pivot could supercharge momentum. Short-term volatility is expected, but long-term holders may benefit from a liquidity-driven rally.

Ethereum’s DeFi power tilts toward L2s as bulls eye $6.7K

Key points:

  • Layer-2s like Arbitrum and Base now dominate DeFi activity, while Ethereum mainnet fees slid to $44 million in August, down 44% from July.

  • Analysts see ETH’s technical setup favoring upside, with Fundstrat projecting $5,500 by mid-October and some charts pointing toward $6,750.

News - Ethereum is showing two faces. On one hand, ETH continues to test new highs, with traders watching support near $4,400 and resistance just under $4,700.

On the other, its base layer is seeing less DeFi activity than during the 2021 peak. August fee revenue slipped to $44 million, while Arbitrum and Base surged ahead with $20 billion and $15 billion in total value locked.

L2s as the new engine - The surge in transactions highlights how rollups are becoming the practical home for everyday DeFi. Last month, Base processed over 300 million transactions compared with fewer than 50 million on Ethereum itself.

Offchain Labs’ AJ Warner calls Ethereum the “wire transfer” layer of crypto finance, anchoring tokenized funds from firms like Franklin Templeton, while rollups play the Venmo role.

Messari’s Alice Hou notes that features like Uniswap v4’s hooks can be trialed more cheaply on L2s, with smaller liquidity providers chasing better yields there. Still, big names like Aave keep most of their liquidity on Ethereum mainnet.

Institutional tilt toward ETH - Standard Chartered says Ethereum digital asset treasuries enjoy a structural edge, combining staking yields with fewer regulatory hurdles compared to Bitcoin DATs. With Ethereum treasuries already holding about 3.1% of supply, the bank expects ETH to see more consistent institutional accumulation than BTC or SOL.

Market outlook - Fundstrat’s Mark Newton sees dips near $4,375 as buy opportunities before a run to $5,500 by mid-October. ETH has been consolidating between $4,471 and $4,671, while chartists flag a bull pennant that could extend gains toward $6,750 if resistance breaks.

Solana holds ground as treasuries grow and Fed cut looms

Key points:

  • Solana corporate treasuries have surged past $4 billion, accounting for nearly 3% of supply, while Galaxy and Pantera signal billion-dollar bets.

  • Analysts flag mixed signals: Altcoin Sherpa says SOL could outperform ETH, but a bearish shooting star pattern points to caution.

News - Solana is commanding market attention ahead of the Federal Reserve’s expected rate cut, trading near $235 after touching $250 over the weekend. The network’s fundamentals look stronger than ever: data from the Strategic Solana Reserve shows corporate treasuries holding 17.11 million SOL, worth just over $4 billion.

Major players include Forward Industries, Sharps Technology, DeFi Development Corp, and Upexi. Galaxy Digital has scooped up more than $1.5 billion’s worth in recent days, while Helius Medical Technologies launched a $500 million treasury backed by Pantera Capital and Summer Capital.

Analyst views diverge - Altcoin Sherpa argued that SOL and BNB look set to outperform ETH, though all majors still hinge on Bitcoin’s trajectory.

Firm support was found around $233, with resistance near $238, and short-term consolidation keeping SOL stable. However, chart watchers spotted a bearish shooting star candlestick after the weekend peak, hinting at a potential pullback if bulls fail to reclaim $250.

Institutional backing and macro tailwinds - Institutional voices remain confident. Pantera’s Dan Morehead called Solana the “fastest and most performing” blockchain, revealing a 1.1 billion dollar position. Galaxy’s Mike Novogratz said Solana’s ability to handle over 6 billion transactions daily could make it a settlement layer for global finance.

Derivatives data also signals optimism, with Solana futures open interest above 70 million SOL and funding rates positive despite a minor CME pullback.

Outlook - With Fed policy easing on the horizon and corporate treasuries rapidly expanding, Solana may be well-positioned to extend gains. But near-term price action will hinge on whether it can defend its $233 floor and break through resistance around $238–$250.

Coinbase, Google push stablecoins into the AI era

Key points:

  • Google has partnered with Coinbase, the Ethereum Foundation, and more than 60 firms to integrate stablecoin payments into AI applications.

  • Coinbase is countering global banking fears, calling deposit flight claims “myths,” while hinting at a future Base token launch.

News - Google is extending its open-source AI protocol into financial transactions, enabling AI apps to send and receive payments with stablecoin support. The initiative, unveiled with Coinbase and the Ethereum Foundation, includes input from Salesforce, American Express, and Etsy. The effort reflects the booming stablecoin market, where circulation has jumped to $289 billion from $205 billion at the start of 2025.

Coinbase’s role extends beyond infrastructure. Its policy head, Faryar Shirzad, rejected claims that stablecoins undermine deposits or lending, arguing that banks are protecting $187 billion in annual swipe-fee revenue.

In blog posts and accompanying papers, Coinbase insisted most stablecoin activity happens abroad, reinforcing the dollar’s global dominance rather than draining U.S. savings.

AI meets stablecoins - Google’s move builds on its earlier “AI agents” protocol, now extended to payments. Analysts suggest these agents could one day manage tasks like mortgages or cross-border commerce without direct human input. Coinbase’s participation signals a push to tie stablecoin rails into mainstream financial and tech ecosystems.

Base token speculation - At BaseCamp 2025, Coinbase confirmed it is “exploring” a token for its layer-2 Base network, which already processes 13 million daily transactions, hosts $5 billion in TVL, and sees over $1.2 billion in daily DEX volume.

Analysts note that these figures already place Base in the same league as Arbitrum and Optimism, underscoring the potential impact of a future token.

Why it matters - With stablecoin rails moving into AI and Coinbase challenging banks’ narrative, the stage is set for stablecoins to evolve from a crypto-native utility into a pillar of global finance.

Interesting facts

  • APAC leads global on-chain crypto activity with 69% YoY growth - In the 12 months ending June 2025, Asia-Pacific (APAC) saw on-chain crypto value received rise from US$1.4 trillion to US$2.36 trillion, a 69% year-over-year increase, making it the fastest-growing region for crypto activity globally.

  • UK’s BoE proposes limits on stablecoin holdings - The Bank of England (BoE) suggested caps of £10,000–£20,000 for individuals and £10 million for businesses on certain systemic stablecoins, warning of financial stability risks. Critics warn this could slow innovation and put the UK at a disadvantage versus EU/US frameworks.

  • France to block “passporting” of crypto licenses under EU MiCA - France has threatened to block crypto firms licensed in other EU countries from operating domestically unless oversight is centralized under ESMA, arguing firms are exploiting weak jurisdictions like Malta and risking regulatory arbitrage.

Top 3 coins of the day

Tezos (XTZ)

Key points:

  • At press time, XTZ was trading at $0.78, marking a 4.52% gain in the last 24 hours.

  • The Supertrend remained bearish, while the EWO showed its first mild green bar after a prolonged red phase, hinting at an early momentum shift.

What you should know:

XTZ advanced over 4% in the past day, rebounding toward the $0.80 zone. The Supertrend indicator stayed in bearish territory, reflecting caution despite the latest uptick. Meanwhile, the EWO, which had remained red across previous sessions, flashed a faint green bar for the first time, suggesting the earliest signs of potential momentum reversal. Trading volume picked up moderately, confirming buyer interest. XTZ now faces resistance near $0.82–$0.85, a zone that previously triggered sell-offs in August. On the downside, $0.74 serves as immediate support, with the Supertrend baseline at $0.71 acting as a critical level to monitor. Beyond charts, Etherlink, Tezos’ Layer-2, reached $47.7M in TVL, bolstered by Bitcoin and stablecoin integrations. Altcoin season tailwinds also played a role, with the CMC Altcoin Season Index at 71/100 favoring mid-caps like XTZ. Together, these drivers position Tezos at a pivotal level: a Supertrend flip and sustained TVL growth could confirm a stronger recovery.

Key points:

  • At the time of writing, AVAX traded at $30, marking a 3.79% gain over the past 24 hours.

  • The 20-day MA stayed above the 50-day MA, while the Awesome Oscillator reflected stronger bullish momentum.

What you should know:

Avalanche sustained its upward momentum, climbing toward the $31 mark as bullish signals continued to build. The 20-day moving average held above the 50-day, underlining the strength of the ongoing uptrend. The Awesome Oscillator stayed firmly in green territory, pointing to sustained buyer pressure. Trading volume hovered near 1.76M, reinforcing the breakout and suggesting market participants remained engaged. From a broader perspective, AVAX’s rally coincided with the crypto market’s altseason rotation, drawing capital into strong Layer-1 projects. Institutional interest also strengthened after Bitwise filed for an AVAX ETF, while network activity surged with 11.9M transactions processed in just a week. Moving forward, holding above $29.00 will be crucial to maintain momentum, with the $33.00–$34.00 band acting as the next key resistance zone to watch.

Kaia (KAIA)

Key points:

  • KAIA was last seen at $0.159, logging a 3.37% increase in the past 24 hours.

  • The Parabolic SAR stayed below the candles, while the RSI hovered at 57.36, indicating steady bullish momentum.

What you should know:

Kaia recorded a modest uptick in the latest session, moving closer to the $0.16 zone as technical conditions continued to support a gradual advance. The Parabolic SAR maintained its position beneath the price action, hinting at sustained upside pressure. Meanwhile, the RSI edged higher to 57.36, suggesting that buyers were in control without pushing the token into overbought territory. Trading volume came in at 9.51M, showing moderate engagement as the market consolidated above recent support levels. For now, the key level to monitor lies near $0.150, which serves as an important floor for bulls to defend. On the upside, a decisive close above $0.165 could pave the way for a push toward $0.175, strengthening the ongoing recovery phase.

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