HTX DeepThink: Rate Cut Expectation Delayed to September, Exacerbating Cryptocurrency Market Structure Divergence

On April 27th, Chloe—columnist at HTX DeepThink and researcher at HTX Research—pointed out that the crypto market’s current macro framework has shifted: from “waiting for rate cuts to drive liquidity trading” to a constrained environment marked by “higher rates for longer, sticky inflation, and war impacts.” A recent Reuters survey shows most economists have pushed back their expectations for rate cuts to after September, with nearly a third seeing no cuts at all this year. The main driver? Rising energy prices tied to the Middle East conflict have pushed inflation higher, curbing the Fed’s room to maneuver. This shift has directly eroded the two key pillars that previously supported crypto assets: expectations for looser liquidity and a path of falling interest rates. High oil prices, paired with steadily rising PCE inflation expectations, have raised the odds that rates will stay high—or even rise further—boosting discount rates and simultaneously shrinking risk budgets. As a result, marginal capital flowing into crypto has slowed, pressuring high-volatility assets across the board. Notably, this isn’t a typical “flight to safety” market. Even as geopolitical tensions escalate, gold and crypto haven’t rallied in tandem. Instead, the market is seeing rising rates paired with broad pressure on risk assets—signaling a “liquidity contraction” phase, not a “flight to safety rotation.” From a market structure standpoint, differentiation is stark: - Bitcoin (BTC) has benefited from institutional inflows, ETF allocations, and macro hedging narratives, holding up relatively well against declines but still heavily reliant on U.S. dollar liquidity and retaining its risk-asset identity. - Ethereum (ETH) depends more on on-chain activity and fund inflows, with limited resilience in the current environment. - Many altcoins—especially those tied to AI narratives or projects without cash flow—are still in a phase of valuation compression and ongoing liquidity outflows. Overall, the crypto market is entering a “high rates + high uncertainty” phase. Short-term trends won’t be broad uptrends; instead, expect structural differentiation and higher volatility. Key turning points hinge on three variables: whether oil prices drop, rate-cut expectations rebound, and policy paths clarify. Until then, the market may stay in a pattern where BTC outperforms relatively, while altcoins face broad pressure.