Fed Rate Decision Looms Over Crypto and Equities
The Federal Open Market Committee (FOMC) is expected to announce its decision on interest rates this Thursday. While the market is pricing in a 70% probability of a rate pause, some analysts caution that strong job data and sticky inflation could lead to a more hawkish outcome.
“Crypto remains highly sensitive to interest rate speculation,”
said Edward Moya, senior analyst at OANDA, on CNBC’s Tuesday segment.
“A dovish Fed could reignite bullish momentum, but a surprise hike or prolonged tightening could pressure risk assets even further.”
Historically, higher interest rates tend to weigh on speculative investments, including cryptocurrencies, as investors pivot to yield-bearing assets like Treasurys. The Fed’s guidance this week will likely dictate short-term sentiment for both crypto and tech-heavy equities.
Kraken OTC Report Highlights Institutional Behavior
Also featured in the episode was Kraken’s Thomas Perfumo, who shared takeaways from the exchange’s latest OTC market report. According to Perfumo, large block trades by institutions and high-net-worth individuals have become more methodical, with a clear shift toward Ethereum and select altcoins tied to real-world utility.
“We’re seeing increased OTC volume in ETH, particularly ahead of Ethereum ETF news and as Layer-2 ecosystems gain traction,”
Perfumo noted.
The Kraken executive also said that OTC desk activity often serves as a bellwether for broader market sentiment, and right now, the trend is cautious optimism. Despite regulatory overhangs and macro pressure, institutions continue to allocate capital to digital assets, just at a more measured pace.
This institutional behavior aligns with a capital rotation trend highlighted earlier this month, where funds continue to flow into large-cap tokens and blockchain infrastructure plays. Read more on Bitcoin’s long-term forecast and liquidity cycles here.
PayPal’s Stablecoin Vision Post-GENIUS Act
Another key segment on CNBC Crypto World featured Dan Dolev, fintech analyst at Mizuho, who discussed how stablecoins are expected to impact PayPal’s business model, especially now that the GENIUS Act has become law in the United States.
The legislation, passed in July 2025, imposes reserve backing, audit requirements, and disclosure rules for stablecoin issuers, effectively bringing them under a regulated umbrella similar to traditional banking instruments.
PayPal’s potential to act as a digital bank using stablecoins could allow it to issue loans, offer high-yield accounts, and facilitate cross-border transactions with minimal fees. For crypto markets, the integration of stablecoins into mainstream fintech infrastructure signals growing legitimacy and broader consumer reach.
The GENIUS Act is widely seen as part of a broader U.S. strategy to harmonize crypto with financial regulations, alongside the CLARITY Act, which seeks to redefine the regulatory oversight between the SEC and the CFTC.
Bitcoin Liquidity and Long-Term Price Outlook
Despite the short-term price dip, analysts remain bullish on Bitcoin’s long-term prospects. Liquidity metrics, ETF inflows, and declining exchange reserves all point to a potential breakout once macro pressures ease.
A recent Glassnode report noted that over 68% of Bitcoin’s circulating supply hasn’t moved in over a year, suggesting that long-term holders remain confident.
Additionally, with Bitcoin ETF inflows crossing $7 billion since early July, capital rotation from traditional markets into BTC appears to be accelerating, a trend echoed in this recent report projecting potential highs of $200,000 by 2026.
Ethereum Holds Strong Despite Market Uncertainty
Ethereum’s performance has also attracted attention. Though it dipped slightly with Bitcoin, ETH continues to exhibit bullish structural support. Key resistance sits at $4,100, which multiple analysts, including Ali Martinez and Michael van de Poppe, have flagged as the breakout zone.
If Ethereum breaches that level, short-term targets include $4,500–$4,800, fueled by strong ETF interest and declining exchange balances. Over 1 million ETH have been withdrawn from centralized exchanges in the last 30 days, reducing immediate sell pressure.
Looking Ahead
While investors sit and wait for the Fed’s decision, short-term micro movement is definitely still likely. If a dovish pause occurs, it could reignite momentum especially if supported by ongoing ETF inflows and favorable regulation. A hawkish surprise could create consolidation or correction temporarily.
In either case, the market’s underlying fundamentals remain intact. Kraken’s institutional insight, PayPal’s stablecoin expansion, and ongoing ETF activity all point to a maturing digital asset sector increasingly influenced by macroeconomics.
Discover more from Being Shivam
Subscribe to get the latest posts sent to your email.