Major cryptocurrencies are showing strength at the start of a critical week for global markets, driven by expectations of a Federal Reserve rate cut, comments from Fed Chair Jerome Powell on quantitative tightening, and anticipation of earnings from leading tech companies in the so-called Mag 7. With global macroeconomic developments in focus, investors are also keeping a close eye on the upcoming U.S.-China summit between Donald Trump and Xi Jinping, which could impact global trade sentiment.
Cryptos Rebound Ahead of Fed Rate Decision
Major digital assets are trading higher, signaling renewed optimism among investors ahead of a week packed with high-profile economic and geopolitical events. Bitcoin (BTC) has seen a 1.7% increase over the past 24 hours, reaching $113,600 and extending its three-day winning streak. Analysts attribute the recent upswing to signs of seller exhaustion near the 200-day simple moving average (SMA) at $108,800, a historically significant technical level.
While BTC has yet to surpass the 50-day SMA at $114,250, a crucial resistance point, market sentiment remains cautiously bullish. If BTC breaks above this level, analysts expect near-term momentum to accelerate, potentially attracting renewed inflows from institutional and retail investors alike.
Other leading cryptocurrencies have also recorded strong gains. XRP, ether (ETH), and solana (SOL) have all risen approximately 3% in the past 24 hours. Notably, XRP reclaimed its 200-day SMA at $2.60, signaling a possible resurgence in bullish momentum. The move reflects growing investor confidence in payments-focused cryptocurrencies and could signal renewed appetite for high-liquidity tokens as macroeconomic conditions evolve.
Federal Reserve Rate Cut Anticipated
Market attention is squarely on the Federal Reserve this week, with the central bank widely expected to implement a 25 basis point rate cut on Wednesday, reducing the policy rate to 4%. If enacted, this would bring total easing since September last year to 150 basis points, reflecting a broader shift toward a more accommodative monetary stance amid slowing growth and moderate inflation pressures.
CME Fed funds futures markets are pricing in near certainty of the move, with expectations for further cuts into 2026. Historically, such easing has tended to support risk assets, including equities and cryptocurrencies, as lower interest rates reduce the cost of capital and increase liquidity in financial markets.
Powell Focused on Labor Not Just Rates
Fed Chair Jerome Powell’s upcoming press conference is expected to be pivotal. While the rate cut itself is largely anticipated, market participants will be closely watching Powell’s tone regarding the Federal Reserve’s quantitative tightening (QT) program and broader macroeconomic outlook.
Powell is likely to reiterate that downside risks to the labor market are becoming more concerning, while inflation pressures—particularly those driven by tariffs—are expected to remain transitory. Analysts note that Powell will likely emphasize the Fed’s commitment to labor market stability, even as headline inflation cools toward the central bank’s target.
The ongoing U.S. government shutdown adds a layer of uncertainty, as fresh labor data will be limited. However, Powell is expected to downplay the immediate impact of the shutdown, leaning on prior September forecasts which projected a gradual decline in the unemployment rate to 4.3% by 2027 and inflation moderating to 2.6% by 2026.
Quantitative Tightening on the Brink
Beyond the rate cut, a more significant development could come from the Fed’s balance sheet policies. Powell has indicated that the central bank may soon approach a point to end its quantitative tightening program, which began in 2022. The central bank’s reserves recently fell below $3 trillion—a threshold often considered adequate for maintaining liquidity—raising speculation that QT could be paused or concluded in the near term.
While this does not signal an immediate return to quantitative easing (QE), markets interpret any easing of QT as supportive for risk assets, including cryptocurrencies. Social media chatter around crypto has already reflected optimism that the end of QT could boost liquidity and market participation.
Bank of Japan Likely to Hold Rates Steady
Across the Pacific, all eyes will be on the Bank of Japan (BOJ), which is expected to maintain its current policy rates on Thursday. While no change is anticipated, market participants will carefully assess any fresh economic or interest rate projections from Governor Ueda.
According to Scotiabank analysts, markets are not pricing in a rate change at this meeting, but some investors expect a possible quarter-point cut in December, followed by more substantial easing in early 2026. Any divergence from these expectations could introduce volatility into global markets, including equities and crypto.
Mag 7 Earnings Spotlight on AI Spending
Tech earnings will also be in the spotlight this week, with Apple, Meta Platforms, Alphabet, and Microsoft—key members of the “Mag 7”—reporting results. Analysts will be scrutinizing these reports for insights into AI-related capital expenditures, which have fueled significant risk appetite in global markets since 2023.
Strong earnings or indications of continued AI spending could support equities and high-beta assets, including cryptocurrencies. Conversely, signs of a slowdown in tech spending could trigger risk-off sentiment, leading to potential short-term declines across speculative markets.
Trump-Xi Summit Raises Trade Optimism
Geopolitics is also contributing to market sentiment. U.S.-China trade tensions eased over the weekend after both sides suggested a trade deal could be nearing completion. The upcoming meeting between Donald Trump and Xi Jinping at the APEC Summit in South Korea on Thursday has investors watching closely.
Positive outcomes from this summit could reinforce risk-on sentiment, lifting equities and cryptocurrencies. Conversely, any failure to reach substantive trade agreements could prompt market caution, especially for assets with higher risk profiles like tech stocks and digital currencies.
Market Outlook
Overall, global markets are entering a high-stakes week where macroeconomic policy, corporate earnings, and geopolitical developments intersect. Cryptocurrencies, led by Bitcoin and XRP, are showing early signs of bullish momentum ahead of the Fed’s anticipated rate cut.
Investors will be closely watching Powell’s remarks, BOJ’s policy stance, Mag 7 earnings, and the Trump-Xi summit for signals on liquidity, inflation, and global economic growth. While technical indicators suggest near-term upside for digital assets, market participants remain vigilant, aware that even minor deviations in policy or earnings expectations could produce swift volatility.
For Bitcoin, the key levels to watch are the 50-day SMA at $114,250 and support at the 200-day SMA of $108,800. For XRP, reclaiming the 200-day SMA signals renewed bullish sentiment, but confirmation requires sustained trading above this threshold.
As global investors navigate these intersecting dynamics, the week ahead promises a crucial barometer for risk appetite across equities, cryptocurrencies, and broader financial markets.
