Powell’s Cut: Boom or Bust?

Welcome back to The Warmup.

It’s FOMC day! One cut is priced in, but Powell’s words will decide if markets rip or dip.

Here’s what we’re watching:

• Market Snapshot

• Altseason Setup Is Heating Up

• HYPE FOMC Setup

• Fed Week Is Here – What’s the Move?

Market: Crypto is sliding into the FOMC meeting, BTC dips just under $115K, ETH drops nearly 2% to $4,526, and SOL leads losses, down over 3% at $235.

Altseason Setup Is Heating Up

What’s going on:

Bitcoin dominance has been sliding for weeks, and if it keeps dropping, the next key level is 44%. The same zone we saw at the peak of the 2021 altcoin mania.

At the same time, the total altcoin market cap (ex-BTC & ETH) is testing its 2021 highs. A clean breakout here could mark the start of a new expansion phase for alts and set up the largest rotation of this cycle.

The Altcoin Season Index is already at 78, firmly in altseason territory.

The one thing holding risk assets back right now? ISM, which is stuck at 48 and has been in contraction for over 30 months. The longest stretch on record.

History shows markets often start rallying while ISM is still below 50. You can already see that in gold and the S&P 500, both sitting at all-time highs.

The strongest moves typically come once ISM flips back into expansion.

What it means:

Today’s Fed decision could be the catalyst: a rate cut would likely unlock liquidity, push ISM back above 50, and trigger flows out of $7.4T sitting in money market funds.

If that happens, it could be the spark that unleashes a full-scale altcoin breakout.

Patience here could pay off big.

HYPE FOMC Setup

What’s going on:

HYPE just printed a strong bounce at its prior breakout level after retracing from its $57.5 ATH.

With the FOMC meeting today, rate cuts and forward guidance could set the tone for the rest of Q4, so volatility risk is elevated.

This is a “wait for confirmation” zone, the next move likely depends on FOMC outcome and market reaction.

Key levels we’re watching:

• Support: $52–53 → needs to hold to keep bulls in control

• Resistance: $57.5 → prior ATH and first upside hurdle

• Breakout target: $60+ if FOMC sparks momentum

• Breakdown risk: Below $52 likely drags price back into prior range

Directional Bias: Neutral to cautiously bullish

What we’re waiting for:

• Confirmation of $52–53 support holding after FOMC

• Volume follow-through on any bounce through $55

• Clean reclaim and close above $57.4 before considering breakout plays

Fed Week Is Here – What’s the Move?

What’s going on:

It’s Fed week, and all eyes are on Powell. The FOMC meets today, and markets are pricing in a 96% chance of a 25bps cut, with a small 4% chance of a surprise 50bps.

The setup is unusual: the S&P 500 is near all-time highs, GDP growth is strong, and yet the Fed is about to ease.

Historically, rate cuts this close to ATHs have been bullish, with stocks gaining an average of 13.9% over the next 12 months.

The tension is in Powell’s tone.

The labor market is cooling but not collapsing, inflation is still sticky at 3.1%, and future cuts are already heavily priced in. That leaves the door open for a “hawkish cut”, where Powell signals fewer cuts ahead, forcing a market re-price.

What it means:

The cut itself probably won’t move markets, Powell’s press conference will.

If Powell leans dovish, it could supercharge risk assets and crypto. But if he pushes back on expectations, we could see a short-term pullback before the easing cycle takes over.

Either way, we’re at the start of a new rate-cut cycle. Liquidity is coming back, and historically that’s rocket fuel for risk assets.

• Circle launches USDC natively on Hyperliquid

• Arthur Hayes says money printing isn’t over

• Polygon plans 33% transaction capacity boost

Global liquidity is at a record $184.9T and still expanding, historically a green light for risk assets.

Investors should stay overweight equities, ETH/BTC, and gold heading into Q4, with a tilt toward Emerging Markets and China where flows are picking up.

Use any dips from Fed or PBoC liquidity pauses to add exposure rather than cut risk.

The playbook: stay risk-on until liquidity rolls over, that’s when you trim.

— The Warmup Team

Always do your own research. This newsletter is supplemental material to help educate readers as they make their own decisions. Projects mentioned here are provided to give a potential early-mover advantage.