Crypto traders may have just caught a quiet but powerful signal for the next big altcoin rally. Federal Reserve Chair Jerome Powell hinted that the phase of aggressive tightening could soon end, opening the door for more liquidity to flow back into the markets.
If this happens, it could boost Bitcoin first, then Ethereum, and finally altcoins, a pattern that has historically kicked off altcoin seasons.
In his recent speech on October 14, 2025, Fed Chair Jerome Powell said the economy hasn’t changed much since September, which means no surprise rate hikes are expected.
He added that the Fed’s current policies are working well and that stronger-than-expected growth allows them to move slowly without shocking markets.
The key takeaway for crypto traders was Powell’s comment that the Fed may soon end balance sheet contraction (QT). Since 2022, QT has drained billions from markets, but ending it would help stabilize liquidity and borrowing costs, making it easier for money to flow into risk assets like Bitcoin and altcoins.
And this subtle shift in tone is already catching the attention of traders.
According to Bull theory, the market is already expecting at least one 25bps rate cut in late October, with possibly more before year-end. Lower interest rates usually make money cheaper, encouraging investors to take on more risk.
When liquidity returns, Bitcoin often benefits first, followed by Ethereum and then mid-cap altcoins and meme tokens.
Bull Theory notes that every major altseason since 2017 has started this way, following periods when the Fed shifted toward easier monetary policy.
Crypto analyst Benjamin Cowen offers a reality check on the altcoin season. He says that for a real altcoin rally to happen, Ethereum first needs to surpass $5,000 and hold it as support.
This depends on Bitcoin reaching new all-time highs, which would push BTC dominance higher, a pattern seen in past cycles.
In 2017, BTC.D peaked before Ethereum, and mid-cap altcoins surged. In 2021, dominance topped again before funds flowed into Layer 1s and DeFi. BTC.D is still climbing, showing the market is consolidating.
Altcoins can only surge after Bitcoin leads the way.
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