Markets are front-running today’s FOMC decision, pricing in the first Fed rate cut of 2025. Treasury yields have fallen, the dollar has weakened to levels not seen since March 2022, and gold has surged above $3,700 per ounce for the first time ever. This macro environment is creating a high-stakes backdrop for crypto, with Bitcoin and altcoins poised to react to any dovish surprises from the Fed.

This week, we break down the macro landscape, including the latest dollar moves, Treasury yields, and gold flows, and analyze how these shifts may influence Bitcoin, altcoins, and dominance metrics. Among the highlights: Bitcoin reclaimed $116,900 this morning, TOTAL3 approaches 1.13T again, and ETH/BTC and OTHERS/BTC navigate critical historical levels that could set the stage for next moves in the market.

Here’s what we’ll cover today:

Let’s dive in.

Market consensus overwhelmingly expects a 25 basis point cut, bringing the federal funds rate to a range of 4.0%–4.25%. This would mark the Fed's first easing move of 2025 amid growing concerns about labor market softening. The key focus, however, will be the updated dot plot projections. Analysts broadly anticipate officials signaling two rather than three cuts for the remainder of the year, though by a narrow margin. The current dot plot consensus still points to two cuts before year-end, but any dovish surprises could accelerate the timeline and provide additional tailwinds for risk assets.

The 2-year Treasury yield's intraday decline from around 3.54% to 3.51% reflects this positioning ahead of today’s highly anticipated Fed decision. The move lower in yields suggests traders are not only pricing in today’s expected cut, but also a more dovish trajectory through year-end.

The Bloomberg Dollar Index’s decline to levels last seen in March 2022 highlights anticipation of a dovish pivot rather than reaction to it. Trading below the 1,200 level, the dollar is now experiencing its most sustained weakness in over three years. The breakdown below key technical supports signals that further downside is likely, especially if the dot plot confirms more cuts than currently expected.

Gold’s breakout above $3,700 per ounce for the first time ever, up 40% year-to-date, illustrates the intensity of pre-positioning ahead of today’s decision. The strong, sustained buying reflects the same macro concerns driving institutional flows into Bitcoin, reinforcing our conviction that digital assets are the next evolution of monetary alternatives.

The EUR/USD pair’s surge above 1.17 further underscores the growing monetary policy divergence that will become official after today’s meeting. The breakout above key resistance suggests traders are positioning for an extended period of dollar weakness, supporting our broader thesis that fiat currency concerns are increasingly driving crypto adoption.