Bitcoin surged toward $117,000 on heightened expectations of a U.S. Federal Reserve rate cut, with investors parsing every nuance of Fed communications for clues on the path of monetary easing.
Key Takeaways:
- The U.S. Federal Reserve is now seen as having a ~100% chance of cutting interest rates by 25 basis points in the upcoming FOMC meeting.
- BTC recently tapped the $117K area, peaking around $117,300 (a four-week high) but is facing resistance around $118,000. A break above that could push BTC toward new all-time highs.
- Traders are moving with caution as futures open interest has dropped by about $2 billion ahead of the rate decision, while spot demand via Coinbase remains relatively strong, particularly around support at ~$115,000.
Bitcoin has surged to a four-week high, climbing above $117,000 (BTC/USD) in anticipation of a rate cut from the Federal Reserve. According to the CME’s FedWatch Tool, a 25 basis point (bps) cut is almost certain, with ~96% probability. Other markets like Polymarket also reflect similar odds.
The likelihood of a rate change at the upcoming FOMC meeting on September 17. Source: CME Group
Much of the recent upward momentum has been fueled by expectations that interest rate cuts will make risk assets like Bitcoin more attractive. However, many analysts caution that the major event now isn't just the cut itself, but the language Fed Chair Jerome Powell uses afterward. Traders expect volatility around that.
Traders Scale Back Derivatives Exposure
In parallel, derivative markets show signs of de-risking, according to a Cointelegraph report. Futures open interest has dropped by about $2B in five days, indicating traders are reducing exposure ahead of the policy decision. At the same time, spot demand (especially in the U.S.) is being observed via the Coinbase premium, suggesting buyers are defending the ~$115,000 level.
Market Update: Bitcoin Holds Steady Near $117K
Bitcoin (BTC) is holding firm, trading near $117K ahead of an upcoming Fed rate cut announcement. As of this writing (11:00AM UTC), the token sits at approximately $116,320, a modest 0.8% gain over the past 24 hours and reaching intraday highs near $117,321 and lows around $114,866.
Analysts Caution on Post-Fed Volatility
Market watchers remain divided on how Bitcoin will react once the Federal Reserve delivers its decision. Swissblock, a private wealth manager, wrote on X (formerly Twitter) that “markets are locked on the FOMC Wednesday, with a 25 bps cut priced in,” emphasizing that Powell’s remarks will be closely looked forward by the public especially traders and investors. Other analysts echoed that while the rate cut is largely expected, the real driver of volatility will be the forward guidance, particularly whether Powell signals a series of cuts ahead or maintains a cautious stance that could temper investor enthusiasm.
What’s Next
Bitcoin has rallied into the Fed’s policy decision with expectations of a rate cut already priced in, but the market remains highly sensitive to Powell’s tone in the aftermath. In the short term, traders are watching not only the Fed’s announcement but also the broader reaction across financial markets, which may determine whether Bitcoin’s current momentum develops into a sustained rally or fades into another round of consolidation.
Summary
Bitcoin climbed near $117,000 as markets priced in a near-certain 25 bps Federal Reserve rate cut ahead of the September FOMC meeting. Futures open interest fell by about $2B, showing traders de-risking, while spot demand on Coinbase suggested buyers defending ~$115K. BTC traded at $116,320 with modest gains, peaking at $117,321 intraday. Analysts warn the real volatility will hinge on Fed Chair Powell’s guidance—whether he signals a series of cuts or maintains caution. The outlook remains sensitive, with BTC momentum dependent on macro policy signals and broader market reactions.
