Rising Fed Rate Chatter Sparks Caution for Crypto, Says Santiment - Coinedict

The crypto market is buzzing with optimism after U.S. Federal Reserve Chair Jerome Powell hinted at a possible September 2025 interest rate cut. But according to market intelligence platform Santiment, the surge in social media chatter around the Fed may actually be a red flag for investors.

Fed Rate Cut Hopes Drive Market Euphoria

At the annual Jackson Hole economic symposium, Powell noted that inflation and labor market conditions “may warrant adjusting” the Fed’s policy stance. His dovish tone fueled a market rally, with crypto sentiment swinging back into the “greed” zone.

However, Santiment warns that the sharp rise in discussions around Fed-related keywords—such as rate cut, Powell, and Fed—has reached an 11-month high. Historically, such spikes in hype around a single bullish narrative have often marked local tops in crypto prices.

Analysts Divided on the Fed’s Next Move

The CME FedWatch Tool shows that 75% of traders expect a rate cut in September, boosting optimism across risk assets, including crypto. Yet analysts remain split:

• Bullish outlook: Some, like trader Ash Crypto, believe the Fed’s easing will trigger a parabolic rally, with altcoins potentially gaining 10x to 50x in the coming months.
• Cautionary view: Others, including Markus Thielen of 10x Research, argue it’s too early to expect a strong bullish impulse. He warns Bitcoin could still face short-term pressure from recession fears, even if longer-term opportunities remain intact.
• Bearish scenario: Economist Timothy Peterson has cautioned that if the Fed delays cuts into 2026, it could weigh heavily on the entire crypto market.

Key Takeaway

While Powell’s remarks have reignited hopes of fresh liquidity entering crypto, Santiment’s warning suggests that investors should remain cautious. Overhype around the Fed could indicate overheated market sentiment—something that often precedes pullbacks.

For now, all eyes remain on the September Fed meeting, which could set the tone for both Wall Street and crypto markets heading into the final quarter of 2025.