Fed Rate-Cut Hopes and Trump Pardon Lift Crypto

Introduction: A softer-than-expected CPI print and growing expectations of Federal Reserve rate cuts combined with an unexpected presidential pardon for Binance founder Changpeng Zhao to produce a notable short-term lift across crypto. The reaction drove rallies in large tokens like BNB while exposing fragile, leveraged positions—roughly 118,500 traders were liquidated for an estimated $195 million. Meanwhile, Ethereum Classic (ETC) bucked the rally with a sharp pullback. This article explains the drivers, breaks down the ETC move, and highlights what traders should watch next.

Macro Drivers: Fed Outlook and Political Shock

Fed rate-cut expectations after softer CPI

The latest CPI reading came in cooler than many had feared, nudging inflation indicators lower and increasing the odds that the Federal Reserve will pivot toward easing. Traders and risk-asset allocators interpreted the data as supportive of future rate reductions, which often loosens dollar pressure and boosts demand for higher-yielding or speculative assets such as crypto. That shift in expectations contributed to a broad uptick in risk appetite over the past 24 hours.

Trump pardon for Binance’s CZ and sentiment ripple

Compounding the macro impulse was an unexpected political event: a presidential pardon for Changpeng Zhao. The pardon removed a major regulatory overhang for Binance and triggered a pronounced rally in BNB, while also improving sentiment across many large-cap digital tokens. Political developments of this scale can create fast-moving sentiment swings that outweigh technical considerations in the near term.

Liquidity Stress: Flash Liquidations and Volatility

What the liquidation numbers mean

Despite the positive headlines, the session saw intense churn: approximately 118,535 traders were liquidated, totaling near $194.8 million. Those figures indicate heavy leverage in derivatives books and a fragile short-term structure—price moves that would have been manageable in less leveraged conditions instead cascaded through forced position closures, amplifying volatility.

Trader takeaway: manage leverage

High liquidation events underscore the importance of position sizing and stop management. Even when macro tailwinds appear, rapid reversals remain likely if subsequent data or headlines deviate from expectations. Traders should consider lowering leverage and widening stops around major macro releases and political developments.

Micro Mover: Ethereum Classic’s Pullback

ETC price action and context

While large tokens rallied, Ethereum Classic (ETC) fell roughly 5.37% over the past 24 hours to about $68.03, reversing part of the prior week’s gains. The sell-off likely reflects a combination of profit-taking, thinner liquidity on ETC pairs, and amplified downside pressure from broader volatility—smaller-cap or lower-liquidity tokens often move more sharply in such environments.

Key levels and what to watch

Traders watching ETC should monitor intraday support in the mid-$60s and resistance back toward recent highs. Volume patterns will reveal whether this is a transient correction or the start of a deeper unwind. Compare ETC’s behavior to larger tokens: divergence (ETC weakening while majors strengthen) can be a signal that flows are concentrating in higher-liquidity names.

Practical Guidance for Traders

Given the confluence of macro and political catalysts, traders should prioritize three actions: 1) reassess leverage and margin exposure ahead of fresh economic releases; 2) track headline risk closely—political developments can undo technical setups quickly; and 3) watch liquidity metrics for each token, as smaller-cap assets can diverge dramatically from larger peers.

Conclusion

Recent macro signals — a softer-than-expected CPI print and rising odds of Federal Reserve rate cuts — combined with an unexpected presidential pardon for Binance founder Changpeng Zhao, have produced a clear risk-on reaction across crypto. Traders saw brief liquidity spikes that triggered roughly 118,500 liquidations totaling about $195 million, underscoring ongoing fragility in highly leveraged positions. While large-cap tokens including BNB rallied on the pardon, smaller-cap assets such as Ethereum Classic experienced a sharp correction, falling about 5.4% to near $68. This juxtaposition highlights that policy shifts and political events can lift sentiment broadly yet create idiosyncratic pressure on specific tokens. Risk management and close monitoring of macro releases remain essential for traders navigating this environment.