The Fed's actions will depend heavily on two main sets of data:

If inflation numbers show that prices are cooling, it gives the Fed more flexibility to lower interest rates. A recent positive PPI print, which can be a leading indicator for CPI, came in below expectations and could provide the Fed with more room to act at their meeting. Lower rates typically weaken the dollar and encourage investment in assets such as crypto.

A weakening labor market, signaled by a slowly rising unemployment rate, is a significant factor that could push the Fed to ease monetary policy sooner rather than later.

Based on these factors, here are a few potential scenarios for the crypto market:

Dovish Fed / Cooling Inflation:
In this scenario, the Fed hints at more aggressive rate cuts due to stable inflation and a weaker job market. This would likely cause the U.S. dollar to weaken, improve global liquidity, and lead to a rally in risk assets. Under these conditions, the crypto market could see a renewed surge in buying, with Ethereum and Solana potentially benefiting the most as investors seek assets with higher growth potential.

Mixed Signals:
If the economic data is uneven, the market might enter a period of consolidation. Bitcoin could trade within a steady range, while other cryptocurrencies might see choppy price movements.

Hot Inflation / Hawkish Fed:
If inflation numbers are surprisingly high and the Fed signals a more cautious approach to rate cuts, the U.S. dollar would likely strengthen and liquidity would tighten. This would put pressure on all risk markets, including crypto. Bitcoin could retest key support levels, and other smaller cryptocurrencies would likely underperform.

Global liquidity, which includes central bank balance sheets, is a key driver for asset prices. When the Fed eases its policy, money tends to move into assets with higher risk and potential for higher returns, with crypto being a major beneficiary. The influence of these macroeconomic shifts can be amplified by short-term factors like the flow of money into and out of crypto ETFs and the supply of stablecoins.

Bitcoin (BTC):
The market is currently resetting, with inflows and outflows from spot ETFs having flatlined recently. The core outlook remains positive for a potential final push to new highs or an extended period of consolidation, depending on the Fed’s actions.

Ethereum (ETH):
Ethereum appears to be in a solid position, holding above major support levels. While recent ETF outflows have been a factor, they have historically marked a local bottom. Ethereum's growing stablecoin supply also indicates strong underlying demand, and it is expected to outperform Bitcoin for the rest of this market cycle.

Solana (SOL):
Seen as the clear number two after Ethereum, Solana continues to look strong. Its price has been outperforming Bitcoin and Ethereum on a one-year basis, and with upcoming ETF news, it is expected to continue its upward momentum.

While the market shows signs of cooling, institutions continue to accumulate BTC and ETH.

Bitcoin (BTC):
Inflows remain stronger than outflows. Total AUM rose $145B → $148B, resembling previous bottoms (Apr ’25, Aug ’24). Indicates uncertainty rather than a broad sell-off.

Ethereum (ETH):
ETF flows slowed, with some outflows, but still saw ~$1B net inflow in Aug. Historically, such pullbacks have marked local bottoms.

Ethereum leads in usage. Stablecoin supply on ETH grew +$7.3B since Aug, pushing the total above $165B. Strong sign of network demand and ecosystem growth.

Bitcoin (BTC):

Ethereum (ETH):

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