Having said that, if these players stumbled, the fallout could ripple through both crypto and the broader financial system.
Building on concerns about institutional risks, another warning sign is emerging from the macro side.
Optimism over a potential Fed rate cut in September has driven fresh rallies across crypto, especially after Chair Jerome Powell’s dovish remarks at Jackson Hole.
But according to Santiment, social media mentions of Fed-related keywords like “rate cut” and “Powell” have spiked to their highest in nearly a year, a classic signal of overheated sentiment.
Usually, when one bullish narrative dominates the discussion, markets have often topped out shortly after.
While many traders see looser monetary policy as rocket fuel for crypto, there are possibilities that the euphoria itself could trigger the next pullback.
However, not all analysts believe the Fed’s next move will spark an immediate rally.
Markus Thielen, Head of Research at 10x Research, argued in an April report that betting on a quick bullish impulse is premature.
While he saw long-term upside for Bitcoin [BTC], he warned that recession concerns could keep prices under pressure in the near term.
Similarly, Network Economist Timothy Peterson noted in a series of tweets that if the Fed delays rate cuts altogether this year, it could weigh heavily on crypto markets.
As it stood, the rate cut possibility was at 75%.
In fact, investors may need to temper expectations. Any benefits from a rate cut could take time to materialize.
