Bitcoin and Gold React to Rate Cut Speculation Amid Mixed Market Forecasts

On Monday morning, Bitcoin prices were slightly above the $111,000 mark, a decrease from their peak of around $124,000. Despite growing expectations for an interest rate cut by the Federal Reserve, the leading cryptocurrency saw a 0.3% dip to $111,707. Meanwhile, Ethereum fell over 3% to $4,296, though XRP performed better, climbing 2.5% to $2.91.

The anticipation of a Fed rate cut, driven by a lackluster jobs report, also boosted global stocks and pushed gold prices past the $3,600 per ounce threshold for the first time. Spot gold rose 0.5% to $3,605.13 per ounce, while U.S. gold futures declined slightly to $3,639.10. Retail investor sentiment for the SPDR Gold Shares ETF (GLD) remained extremely bullish.

Adding to the market analysis, experts and economic forecasts present a mixed but generally optimistic near-term outlook for the crypto market. The consensus among major banks, including Goldman Sachs and Bank of America, is that the weak jobs data will likely prompt the Fed to implement at least two interest rate cuts before the end of the year. This monetary easing is typically seen as a positive macro signal for risk assets, including cryptocurrencies, as it increases liquidity and investor appetite for higher-risk investments. Crypto.com CEO Kris Marszalek has openly stated he's betting on these rate cuts to fuel a crypto bull run in the fourth quarter of 2025, mirroring a similar surge that followed last year's rate relaxations.

However, not all analysts are bullish. Analysts caution that increased speculation about a Fed rate cut on social media may signal market overheating and could result in a sharp pullback if expectations are not met. While a bullish medium-term outlook is expected due to resilient long-term accumulation and growing institutional interest, some analysts still debate a potential short-term correction toward the $100,000 mark for Bitcoin. Nevertheless, with significant institutional inflows from spot Bitcoin and Ethereum ETFs and a continued shift of crypto supply into illiquid wallets, many believe the market's long-term structure remains fundamentally strong. 

The prevailing sentiment is that while volatility will remain elevated, the balance of risk and reward favors the upside, with a sustained bullish outlook for the remainder of 2025 and into 2026.