The crypto market is on edge as Bitcoin faces a crucial test. With September Fed rate cut odds dropping sharply to 43%, BTC’s next move could determine whether the bull run survives or collapses. Here’s what traders need to know.
Why the Fed Rate Cut Odds Matter for Bitcoin
The Federal Reserve’s monetary policy directly impacts Bitcoin and crypto markets. Lower rates typically boost risk assets like BTC by increasing liquidity. However, the latest Fed meeting delivered a hawkish surprise:
- September rate cut probability fell from 63% to 43%
- Fed Chair Powell emphasized inflation risks from tariffs
- Benchmark rate held at 4.25%-4.50% range
Bitcoin Support Test: Will $114K Hold?
BTC initially dipped to $115.7K after the Fed announcement before recovering to $118.5K. Analysts warn that losing the $114K-$115K support zone could trigger a deeper correction:
| Scenario | Price Target |
|---|---|
| Hold $114K support | Retest $120K |
| Break below $114K | Fall to $110K |
Crypto Market Outlook: Bullish or Bearish?
Experts are divided on Bitcoin’s next move:
- Bullish case: Swissblock suggests QE or dollar liquidity could push BTC higher
- Bearish risks: Glassnode notes $1.4T in unrealized profits may trigger selling
What’s Next for Bitcoin Investors?
Key factors to watch:
- Upcoming PCE inflation data
- Fed policy signals in August
- BTC’s reaction at $114K support
Final Verdict: While macroeconomic pressures may limit Bitcoin’s upside in the short term, a potential Fed pivot later in 2025 could reignite the bull market. Traders should watch the $114K level closely.
FAQs
Q: Why did Fed rate cut odds drop?
A: Fed Chair Powell’s cautious comments about inflation and tariffs reduced expectations for September cuts.
Q: How does the Fed rate affect Bitcoin?
A: Lower rates increase liquidity and risk appetite, which typically benefits BTC and crypto markets.
Q: What’s Bitcoin’s critical support level?
A: $114K-$115K is the key zone to watch. A breakdown could lead to $110K.
Q: When is the next Fed meeting?
A: The next FOMC meeting is scheduled for September 17-18, 2025.
