Bitcoin and market traders are bracing for the Federal Reserve to cut interest rates by a quarter-point (25 basis points) from the current target range of 4.25%–4.5%. Easing monetary policy could weaken the dollar, potentially fueling rallies in alternative assets like cryptocurrencies and gold.
According to Reuters, the dollar recently dropped to a four-year low, just one day before the Fed is set to announce its decision on September 17 at 2 p.m. local time. A softer dollar typically benefits riskier assets, which are often seen as hedges against inflation—Bitcoin included.
The crypto market has been anticipating a rate cut all week. Over the past seven days, Bitcoin has surged more than 5%, while the overall crypto market capitalization surpassed the $4 trillion mark, reaching $4.16 trillion as liquidity flows into the space.
Adding to the bullish sentiment, BitMine Chairman Tom Lee predicts that Bitcoin and Ethereum could experience a “monster move” if the Fed goes ahead with the rate cut, potentially sparking a three-month rally.
Bitcoin Performance Ahead of the Fed
At press time, Bitcoin is trading at $117,319, up 1.23%. The cryptocurrency has shown resilience, bouncing off the $116,200–$116,300 support zone before surging past $117,200—signaling strong buyer interest ahead of the Fed’s announcement.
This uptick aligns with expectations of a 25 basis point cut, driving a classic “buy the rumor” momentum. A similar pattern emerged in December 2024, when a 25-point rate reduction sent the crypto market into a significant rally.
Bitcoin’s Relative Strength Index (RSI) currently sits at 71.99, briefly entering overbought territory, reflecting strong bullish sentiment. The indicator has since eased slightly, suggesting a potential short-term consolidation.
Despite this, the overall RSI trend still favors upward momentum, indicating that buyers remain in control. Should the Fed confirm a 25-basis-point rate cut, Bitcoin could climb further as traders anticipate easier liquidity conditions.
If the Fed signals a more aggressive easing cycle, BTC might test higher resistance levels, potentially surpassing $118,000. Conversely, a more hawkish stance could prompt a pullback toward the $116,500–$116,700 support zone.
