Crypto Market Rallies After Fed Delivers First Rate Hike Since 2023

Bitcoin gained 0.88% over the past 24 hours to $76,621 as traders focused on the Federal Reserve’s projections, which pointed to only one additional rate increase. Zcash surged 23% to a record high after Paradigm revealed that it holds the privacy-focused cryptocurrency.

Bitcoin climbed to $76,621 on Thursday, up 0.60% since midnight UTC and 0.88% over 24 hours. The move came as investors appeared more focused on the Fed’s outlook for interest rates than on the central bank’s first rate increase in more than three years. Ether rose 1.1% to $2,444.36, while Solana gained 2% to $100.57.

The Federal Open Market Committee raised its target rate by 25 basis points to 3.75%-4%. Fed Chair Kevin Warsh said inflation remained “too high … for too long,” adding that recent data had not shown a meaningful improvement in underlying inflation trends.

The main source of reassurance for markets was the Fed’s “dot plot.” The median projection puts the policy rate at 4.1% at the end of both 2026 and 2027, suggesting only one more 25-basis-point increase rather than an extended tightening campaign.

Broader risk assets also advanced. The Dollar Index declined 0.17%, while Nasdaq 100 futures rose 1.04%, S&P 500 futures gained 0.81%, gold climbed 1.02% and silver increased 1.52%. The two-year Treasury yield fell 2 basis points to 4.71% after reaching its highest level since 2024 during the previous session.

Crypto participated in the broader market rebound instead of driving it, reversing the pattern seen earlier in the week when digital assets had moved more independently from equities. Gains across the crypto market were widespread but particularly strong among speculative assets. A total of 94 CoinDesk 100 constituents were higher over 24 hours, while the small-cap CoinDesk 80 gained 4.7%, compared with a 1.2% increase for the bitcoin-heavy CoinDesk 5.

However, fund flows have not yet reflected the recovery. U.S. spot bitcoin ETFs recorded $295.98 million in outflows on Wednesday, following $450.33 million in withdrawals the previous day, according to SoSoValue. That brings cumulative outflows since Sept. 8 to more than $1 billion over seven consecutive sessions, while total net assets have declined to $95.19 billion.

Bitcoin remains 6.9% below its monthly peak of $82,284, reached on Sept. 4.

Derivatives Positioning

Total open interest across crypto futures increased to $64.4 billion from $59.7 billion on Monday, while 24-hour trading volume reached $112.6 billion. Traders suffered $214.3 million in liquidations over the same period, according to Coinalyze. The increase in open interest suggests traders have been building new positions during the rally rather than simply closing short trades.

Bitcoin futures open interest rose 1.41% to $26.6 billion, while ether open interest increased 1.39% to $16.7 billion. Ether accounted for $60.7 million of liquidations, compared with $42.4 million for Bitcoin.

Zcash provided the clearest example of aggressive positioning. Its open interest jumped 37.84% over 24 hours to $2.2 billion, while $28.9 million in positions were liquidated. The funding rate stood at -0.0253%, meaning short sellers were paying long traders even as ZEC reached fresh highs. Traders have largely positioned against Zcash’s advance throughout the month, resulting in repeated short squeezes.

Bitcoin’s funding rate is positive and moving higher. The aggregated rate stands at 0.0070%, while the predicted rate is 0.0082%. Rates vary significantly between exchanges, ranging from 0.0153% on Kraken to -0.0003% on Huobi.

Coinalyze’s long/short ratio also indicates a bullish bias, standing at 1.13. The measure has remained above 1 for eight consecutive days after spending three weeks below that level.

Token Market

Privacy-focused Zcash jumped 23% over 24 hours to approximately $1,369, marking its highest price on record. The rally followed a post from Paradigm co-founder Matt Huang revealing that the investment firm owns ZEC and characterizing it as “a private complement to Bitcoin.” Huang also supported continued funding for Zcash developers.

The rally came after Zcash holders backed a governance proposal this week to reduce block times from 75 seconds to 25 seconds while maintaining the cryptocurrency’s Bitcoin-style halving schedule. Zcash now has a market capitalization of $23.2 billion.

Monero, another major privacy-focused cryptocurrency, did not participate in the rally. XMR fell 0.97% to $494.14 and was down 1.6% over 24 hours. The valuation gap between the two privacy coins has widened substantially, with Zcash now worth twice as much as Monero.

Among mid-cap cryptocurrencies, NEAR Protocol led 24-hour gains, rising 16% to $2.82, including a 7.6% increase since midnight UTC. Venice Token gained 14% over 24 hours to $25.45, recovering above its level before Tuesday’s Clarity Act vote.

Pump.fun led the CoinDesk 80 index during the day, climbing 7.9% to $0.003926. Perpetuals exchange token Lighter (LIT) rose 7% to $4.92, while Fartcoin gained 6.4%, suggesting speculative trading activity is returning following the market’s earlier focus on Bitcoin after the August short squeeze.

CoinMarketCap’s “Altcoin Season” indicator has also moved higher, reaching 39/100 after spending much of the week near 32/100.

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