Altcoin Rally Stalls – Fed Cut Could Bring More Pain

The cryptocurrency market is moving into the week on shaky footing, with investors nervously eyeing the Federal Reserve’s upcoming rate decision and a rare alignment of market expirations in U.S. equities. What looked like the start of an altcoin rally has quickly morphed into a correction, with over $240 million in liquidations hitting traders as sentiment cools.

Altcoins Lead the Retreat

XRP, Solana, and Dogecoin — the same names that led last week’s charge — are now dragging the market lower. Analysts warn they could fall another 15–20% if history is any guide. Bitcoin, meanwhile, is holding closer to $116,000, giving it an edge as capital retreats from higher-beta assets.

Why Macro Events Matter Now

The Fed’s decision this week is expected to deliver the first of several interest-rate cuts before year-end. While lower borrowing costs often fuel appetite for risk, traders say the news has already been priced in, setting the stage for “sell-the-news” volatility.

Complicating matters is September’s triple witching — the quarterly event when equity options and futures all expire together. Historically, the S&P 500 has struggled in the week that follows, with average returns of around -1.17% since 2000. That weakness in stocks, says analyst Ted Pillows, often spills over into digital assets.

Altcoin Season Delayed, Not Cancelled

The optimism for a so-called “alt season” isn’t gone — just postponed. The Altcoin Season Index recently touched 84, a level that typically signals Bitcoin is losing dominance. But technical charts show BTC.D bouncing from support near 57.5%, suggesting Bitcoin could regain ground toward 60% dominance before altcoins take the lead again.

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If that plays out, the real breakout in altcoins may not arrive until late 2025 or early 2026, when multiple Fed cuts and stronger liquidity conditions align. Analysts argue that’s when a parabolic rotation into altcoins could truly begin.

The Takeaway

Crypto’s near-term fate is tied less to blockchain fundamentals and more to the same macro forces shaping global markets. With Fed policy easing on the horizon and equity markets heading into a volatile expiration week, Bitcoin looks set to remain the defensive anchor, while altcoins wait for a more favorable backdrop to reignite momentum.

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