Bitcoin Price Surges: Will Crucial Fed Rate Cuts Propel BTC to $118K?

The cryptocurrency world is buzzing. Bitcoin price has surged past $117,000, captivating investors. This significant move comes as traders eagerly await the Federal Reserve’s policy decision on interest rates. The market anticipates potential volatility. Furthermore, Jerome Powell’s post-FOMC speech could trigger notable swings toward key BTC price levels. Understanding these dynamics is crucial for anyone navigating the crypto market.

Anticipation Builds for Fed Rate Cuts

Market sentiment indicates a near certainty for upcoming Fed rate cuts. Data from CME’s FedWatch tool shows a 96% chance of a 25 basis point (bps) cut at the September 17 FOMC meeting. Additionally, there’s a 4% probability of a 50 bps reduction. Polymarket bettors echo this sentiment, locking in a 93% chance for a 25 bps decrease today. They also project a 5% chance for a 50 bps cut. These probabilities highlight strong market consensus.

Many analysts believe the market has already priced in any immediate volatile price action from these interest rate cuts. Consequently, traders are now focusing intently on US Fed Chair Jerome Powell’s speech. Powell has faced pressure to lower interest rates. He previously hinted at adjustments, citing prevailing inflation and the labor market situation. Therefore, his language at the FOMC news conference will be closely scrutinized for any shift in tone.

Swissblock, a private wealth manager, noted the market’s focus on the FOMC meeting. They stated, “Markets are locked on the FOMC Wednesday, with a 25 bps cut priced in.” They added that traders will concentrate on “Powell’s stance under the spotlight for hints.” Swissblock managers emphasized that volatility is guaranteed, regardless of the outcome. They further suggested, “Bitcoin’s Risk Index will guide whether BTC’s bullish structure holds or if a sell-off looms on the horizon.”

Bitcoin Price Action: Targeting $118K and Beyond

Bitcoin price has demonstrated resilience, rising to a four-week high above $117,000. This upward momentum has traders closely watching key resistance levels. Bitcoin analyst AlphaBTC suggested that BTC could initially rise to $118,000 on Wednesday. However, it might retrace after the FOMC decision is confirmed. For a continued uptrend toward all-time highs, Bitcoin must flip the $118,000 resistance into strong support.

Crypto analyst Jelle observed, “Bitcoin keeps slowly grinding higher, now pushing into the 116.5K-118K resistance area.” He further stated, “Break 118K and hold above it, and new all-time highs are next.” Data from Crypto News Insights Markets Pro and TradingView confirms BTC is currently “attacking” the resistance between $117,500 and $118,500. Michael van de Poppe, founder of MN Capital, views this as a positive sign. He remarked, “Quite usually it’s just a run before a drop.”

Michaël van de Poppe’s analysis suggests that if the resistance around $118,000 is decisively broken, it could trigger a significant run-up. This move could push BTC price toward $120,000. Subsequently, it might target the all-time highs at $124,500. Conversely, a failure to break this resistance could see a retest of support levels. A key area of interest lies between $116,800 and $114,500, a range Bitcoin held from September 10 to September 16. Below that, the next significant level would be a retest of the $112,000 psychological mark. This level also aligns with the 100-day simple moving average. The outcome of the FOMC meeting will undoubtedly influence these scenarios.

#Bitcoin attacking the range resistance pre-FOMC could be a great sign. Quite usually it's just a run before a drop. We'll see. It's going to be fun! pic.twitter.com/27GySz5j7g

— Michaël van de Poppe (@CryptoMichNL) September 17, 2025

Impact of Fed Rate Cuts on the Crypto Market

The anticipation of Fed rate cuts extends beyond Bitcoin. It significantly influences the broader crypto market. Lower interest rates generally make traditional investments less attractive. This often encourages investors to seek higher returns in riskier assets, like cryptocurrencies. Consequently, a dovish stance from the Federal Reserve could provide a bullish tailwind for digital assets. The upcoming FOMC meeting is therefore a pivotal event for the entire ecosystem.

While the immediate focus is on Bitcoin’s potential surge, the ripple effects will be widespread. Altcoins and other digital assets often follow Bitcoin’s lead. Therefore, sustained positive momentum for BTC could lift the entire market. However, traders must remain cautious. As Swissblock managers highlighted, volatility is a certainty. The market will react to both the rate decision and Powell’s forward guidance. Prudent investors conduct thorough research before making any decisions. Every investment and trading move involves inherent risk.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.