The initial Fed rate cuts drove Bitcoin and Ethereum to double-digit gains, but subsequent cuts disappointed. With another cut expected this month, will the crypto market follow the same pattern or surprise investors?
The first Fed rate cut in September 2024 marked a major turning point. Bitcoin gained 6.6% in one week to reach $64,300, while Ethereum soared nearly 13% toward $2,650. Over a month, both assets showed gains of approximately 11%. This rally was driven by the surprise effect and optimism generated by this first clear pivot toward an accommodative monetary policy. The second cut in November 2024 triggered an even more dramatic movement.
Bitcoin exploded by 16% in seven days and more than 32% over a month, and Ethereum outperformed with a weekly increase of 17% and a monthly rise of 47.5%. This period corresponds to the peak of investor enthusiasm for monetary easing, with increased liquidity seeking higher-risk assets. Trading volumes also surged during these two periods, confirming massive market participation. The general sentiment was clearly bullish, with traders anticipating a favorable sequence of rate cuts.
The December 2024 cut revealed a change in dynamics. Bitcoin briefly crossed $108,000 before falling back below the psychological $100,000 threshold, and Ethereum dropped about 10% the following month, signaling that the market had already priced in the easing trajectory. The fourth cut in September 2025 confirmed this downward trend. Bitcoin retreated by approximately 7% over the following month, while Ethereum lost 13%.
At this point, interest rates were already historically low, and market sentiment had cooled. The marginal effect of successive cuts had significantly diluted. This evolution illustrates a fundamental principle of financial markets: Assets react more to policy changes than to the continuation of an already established trend. Once investors have integrated an easing cycle, additional cuts lose their catalytic power.
Graphical analysis of Ethereum’s price against changes in the Fed’s key rate shows a clear correlation at the beginning of the cycle, followed by a progressive decoupling. The first two reductions acted as powerful triggers, generating technical breakouts and sustained bullish momentum. In contrast, subsequent cuts provided no significant support to prices. The market had already priced in future monetary easing, making each announcement less impactful.
Other macroeconomic factors such as crypto regulation, geopolitical tensions, and overall risk sentiment have regained dominance in price formation. For the cut expected this month, history suggests a moderate reaction. Savvy investors are now monitoring other indicators: inflows into Bitcoin and Ethereum ETFs, on-chain activity, leverage levels on trading platforms, and whale positions. Monetary policy remains a factor, but it is no longer the main driver of crypto movements at this stage of the cycle.
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