Bitcoin cools after summer highs while altcoins flicker and investors eye Fed policy. Is crypto preparing for another rally or deeper retreat?
Summary
- Bitcoin consolidates near $111K after reaching an all-time high of $124K in mid-August, with institutional buyers like MicroStrategy and Metaplanet continuing to add holdings.
- Altcoins mirror Ethereum’s cautious tone, with Solana and XRP edging higher, speculation over an XRP ETF dominating attention, and tokens like Dogecoin, Hyperliquid, Worldcoin, and WLFI showing mixed volatility.
- Macroeconomic factors weigh heavily, as U.S. labor market softness raises expectations of a Fed rate cut in September, with 90% betting on 25bps and 10% considering 50bps.
- Sentiment remains fragile, with the Fear & Greed Index at 42, tariff uncertainty and jobless claims in focus, and crypto likely to move in Bitcoin’s shadow.
Bitcoin cools after record highs as institutions keep buying
Bitcoin (BTC) is settling into a quieter phase after a record-breaking summer rally. In mid-August, the cryptocurrency touched an all-time high near $124,000, before profit-taking began to weigh on prices.
Since then, it has pulled back by about 10%, with trading largely confined to the $110,000 to $112,000 range. As of Sep. 8, Bitcoin held near $112,000, up around 0.7% in the past 24 hours and steady ahead of major macroeconomic events.
The cooling momentum has not discouraged large buyers. On Monday, MicroStrategy disclosed that it had added another 1,955 BTC for $217 million, bringing its total to 638,460 BTC.
Around the same time, Tokyo-based Metaplanet confirmed it purchased 136 BTC for roughly $15.2 million at an average price of $111,666 per coin. The firm now holds 20,136 BTC, acquired for $2.08 billion at an average cost of $103,196.
Other parts of the crypto market have been more muted. Ethereum (ETH), which reached an all-time high of $4,953 on Aug 25, has been trading between $4,240 and $4,480 over the past week.
At around $4,300 today, the second-largest crypto is down about 13% from its peak, showing less momentum than Bitcoin in recent weeks.
Altcoins tread cautiously with flashes of volatility
The broader altcoin market is largely reflecting Ethereum’s restrained trading pattern, though some tokens have shown bursts of volatility.
Overall market cap has edged higher by about half a percent in the past 24 hours, reaching roughly $3.94 trillion. Most large-cap tokens remain clustered near flat levels, with Solana (SOL) and Ripple (XRP) both up around 4–5% in the last 24 hours, alongside Bitcoin.
XRP has been one of the more closely watched tokens, fueled by speculation about a potential exchange-traded fund tied to it.
Several asset managers have filed applications, and prediction markets currently estimate the probability of approval before October at over 90%. The speculation briefly pushed XRP above $3 before it slipped back toward $2.94.
Elsewhere, individual coins have posted mixed results. Dogecoin (DOGE) advanced about 7% on Monday to $0.23, while Hyperliquid rose roughly 8% to trade around $50.6.
Worldcoin (WLD), which promotes an identity verification system, gained more than 20% as reports mentioned a pickup in new sign-ups, extending momentum in tokens linked to artificial intelligence themes.
In contrast, World Liberty Financial (WLFI), a recently launched project with ties to the Trump family, has faced turbulence. More than 270 wallets were blacklisted following concerns over manipulation and token dumping, with actions also affecting the holdings of Tron (TRX) founder Justin Sun.
WLFI has been one of the most volatile names among major tokens, declining more than 31% over the past week to around $0.215.
Overall sentiment across the market has been broadly neutral, as reflected in the Fear and Greed Index reading near 42 out of 100.
The path forward will likely continue to depend on Bitcoin’s direction, leaving altcoins to follow the broader trend, punctuated by short-lived rallies or corrections tied to project-specific developments.
Fragile macro sentiment keeps markets on edge
The broader economic environment will play an important role in shaping sentiment across crypto in September.
In the U.S., the latest labor market data showed signs of cooling, with the unemployment rate climbing to its highest level since 2021 and job creation slowing noticeably.
Those trends have strengthened expectations that the Federal Reserve will begin easing monetary policy at its mid-September meeting on Sep. 17.
According to the CME FedWatch Tool, around 90% of market participants are expecting a 25 basis point rate cut, while about 10% are even considering a 50 basis point move. A half-point cut remains a low-probability outcome, but it would carry far greater implications if delivered.
Such a move would mark the first cut of 2025 after a year of steady rates, while central banks in Europe and the United Kingdom have already lowered borrowing costs multiple times.
The possibility of looser U.S. monetary policy could boost confidence in risk assets, including crypto, as easier financial conditions generally encourage investment flows.
Past data suggest that a modest rate cut could support crypto sentiment by improving liquidity, although an overly sharp move might raise concerns about a weakening economy.
Equity markets have also reflected this uncertainty. Major U.S. indices opened September with steep losses on worries over tariffs and interest rates, only to rebound as bargain hunters stepped in. That recovery in stocks helped steady crypto markets at the same time.
With inflation running in the 2.7% to 3% range and new consumer price data due soon, markets remain cautiously optimistic that the Fed can start cutting rates without sparking renewed inflationary pressures.
The combination of slower growth, easing inflation, and the likelihood of lower borrowing costs could create a supportive backdrop for Bitcoin and other digital assets in the coming weeks.
However, not all bets are aligned with the upside. Large traders are still positioning against Bitcoin, including one whale who recently opened a $150 million short position near the $111,300 level.
Amid this, macroeconomic sentiment remains fragile, shaped by tariff uncertainty and elevated jobless claims.
If the environment turns less favorable, crypto markets are likely to get caught in the crossfire. As always, trade wisely and never invest more than you can afford to lose.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
