Cryptocurrency markets face heightened volatility as expectations for Federal Reserve rate cuts diminish. Traders are scaling back bets on near-term easing, with Polymarket data showing just a 1% probability of a rate cut at the April meeting. June odds stand at 11%, while July expectations have fallen sharply to 21%.

The shifting rate outlook comes amid surprising jobs data and rising Treasury yields. Bitcoin and other digital assets remain sensitive to macro conditions, with institutional investors closely monitoring Fed signals. Market participants now see September rate cut odds at 43%, down 14 points, while October probabilities sit at 55%.

'When the Fed speaks, crypto listens,' noted one hedge fund manager. 'The correlation between risk assets and rate expectations has never been stronger.' The December outlook shows particular weakness, with probabilities dropping 21 points to 63%.