Crypto Markets Rally Amid Fed Liquidity and Altcoin Surge

2025-12-29 23:53:30

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Bitcoin and Ethereum recover while altcoins rally, backed by Fed liquidity, signaling cautious investor optimism in crypto markets.
Crypto market climbs: BTC $89K, ETH $3K; smaller coins and privacy tokens lead gains amid Fed-driven optimism.
Market rally sees BTC and ETH up, altcoins soaring, as Fed liquidity and retail interest boost cautious investor confidence.

The crypto market bounced strongly over the weekend. Bitcoin (BTC) traded near $89,510, while Ethereum (ETH) reclaimed $3,016. This movement coincides with growing expectations for Federal Reserve rate cuts in 2026, fueling risk-on sentiment.

As per CryptoraRank’s series of X posts, the total market capitalization rose to $3.10 trillion, marking a 1.82% gain, while 24-hour trading volume surged 67.2% to $39.65 billion. Hence, investors appear willing to step back into crypto despite lingering market fear. The Fear & Greed Index remained low at 24, indicating cautious optimism.

Bitcoin maintained dominance at 57.6% of the total market, with Ethereum at 11.7%. Large-cap assets such as Binance Coin (BNB) and Solana (SOL) showed modest gains, while stablecoins like USDT remained flat. Moreover, smaller tokens led the charge. TOKEN surged over 200%, followed by ZBT and SEND with gains of 76% and 47% respectively.

In the broader altcoin segment, CC, NIGHT, and LDO posted increases between 4% and 11%. Privacy coins also led weekly growth, with CC up 43%, ZEC 18%, and DASH 16%. TEL and TON both rose 14%, suggesting investor appetite for niche assets is strong.

ETF Flows and Institutional Activity

Despite the market recovery, institutional flows showed caution. Last week, ETH ETFs recorded $102 million in outflows, while BTC ETFs lost $782 million. Lighter’s CEO announced details on their upcoming TGE will be revealed soon, keeping investor attention focused.

Additionally, Robinhood rewarded users with $750,000 worth of BTC, encouraging retail engagement. These factors highlight a mixed sentiment where retail optimism contrasts with institutional conservatism.

Macro Support and Market Implications

The New York Federal Reserve reinforced liquidity through overnight repo operations, injecting $26 billion via treasury bills and mortgage-backed securities. This follows a prior $2.5 billion liquidity injection last week.

Consequently, this easing supports crypto markets as traders anticipate a potential year-end rally. Silver also overtook Nvidia to become the world’s second-largest asset by market capitalization, reflecting broader risk-on sentiment across financial markets.

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