As crypto investors turn cautious, Bitcoin and Ethereum have taken a slight dip this week. The entire market seems to be holding its breath ahead of the U.S. The Federal Reserve’s next interest rate announcement is an event that could set the tone for both traditional finance and digital assets in the short term.On Tuesday’s episode of CNBC Crypto World, analysts weighed in on what the current macro environment could mean for crypto. Alongside this, there were insights from Kraken’s OTC desk and discussions on how PayPal is stepping deeper into the stablecoin space, especially after the recent U.S. legislation.
Fed’s Next Move Could Shift Crypto Sentiment
The Federal Open Market Committee (FOMC) is expected to reveal its decision on interest rates this Thursday. While the majority of market participants are expecting a rate pause, some experts warn that persistent inflation and strong job data could prompt a more hawkish stance.
Edward Moya Said,
“Crypto remains highly sensitive to interest rate speculation. A dovish Fed could reignite bullish momentum, but a surprise hike or prolonged tightening could pressure risk assets even further.”
Historically, when interest rates rise, riskier assets like cryptocurrencies tend to lose steam, as investors shift toward safer, yield-generating options like government bonds. That means the Fed’s tone and guidance this week could significantly influence Bitcoin and Ethereum in the near term.
Kraken’s OTC Trends Signal Cautious Optimism
In the same CNBC segment, Kraken’s Head of Strategy, Thomas Perfumo, shared updates from the firm’s OTC activity. According to him, institutions and high-net-worth investors are leaning more toward Ethereum and specific utility-based altcoins.
“We’re seeing increased OTC volume in ETH, particularly ahead of Ethereum ETF news and as Layer-2 ecosystems gain traction,” Perfumo explained.
He also noted that institutional trades often reflect broader market direction. Right now, that mood seems to be measured but hopeful, with capital still flowing into digital assets just at a slower, more calculated pace.
PayPal’s Stablecoin Vision Gains Clarity
PayPal is ramping up its ambitions in the crypto space, especially after the GENIUS Act officially became law in July 2025. The regulation requires stablecoin issuers to maintain reserves, undergo audits, and meet disclosure standards.
This could work in PayPal’s favor, allowing the company to function more like a digital bank. Think high-yield savings, low-fee remittances, and even crypto-backed loans all powered by stablecoins.
The GENIUS Act, along with the CLARITY Act, is being seen as part of a larger effort to bring crypto under a more unified and transparent regulatory structure in the U.S.
- Altcoins ka Performance Bitcoin and Ethereum might be stealing the headlines, but some altcoins are quietly outperforming. Coins like Solana, Avalanche, and Chainlink have shown surprising strength during recent dips. It seems traders are rotating into layer-1 projects and DeFi tokens in search of better short-term momentum.
- Investor Sentiment / Social Trends Crypto Twitter has been a mixed bag; some are tweeting about incoming pain, others are posting bullish reversal patterns. Sentiment is split, which usually means big moves are coming. On Reddit, a lot of chatter is circling around ETF approvals and macroeconomic uncertainty.
- Technical Analysis Snippet Bitcoin is sitting on a psychological support near $60,000. Technical analysts are watching the 200-day moving average closely. If bulls can defend this zone, we might see a push back toward $64K, but a breakdown could quickly lead to $56K or even lower.
- Global Economic View Global investors are cautious as the Fed’s next announcement could shift risk appetite across markets. Inflation data and interest rate signals from Jerome Powell might either trigger a flight to safety or open the doors to a new wave of crypto buying. Traders in Europe and Asia are also reacting with similar caution.
- Upcoming Crypto Events Aside from price action, the crypto space is gearing up for a few major updates. Ethereum ETF developments, protocol upgrades for Solana, and the upcoming launch of several Layer 2 platforms could impact investor interest. These events might just be the catalysts needed for a trend reversal.
