Bitcoin climbed nearly $2,000 in 24 hours, trading around $112,892 as markets brace for the Federal Reserve’s policy decision. The central bank is widely expected to cut interest rates by 25 basis points to 4.00%, marking a potential turning point for U.S. monetary policy.
Fed Poised to Cut Rates to 4.00%
The Federal Reserve is widely expected to lower interest rates by 25 basis points to 4.00% during Wednesday’s policy meeting, marking a pivotal shift in the U.S. monetary cycle. According to the CME FedWatch Tool, traders are pricing in a 99.9% probability of a rate cut in October, with an additional easing expected by December.
The move follows softening manufacturing data and slowing inflation momentum, as the Richmond Fed Index and PCE readings point to cooling economic activity.
The decision will be accompanied by the FOMC statement at 18:00, followed by Chair Jerome Powell’s press conference at 18:30 where investors will scrutinize his tone for clues on the pace of future cuts.
A dovish signal could accelerate capital flows into risk assets, while a cautious stance may temporarily strengthen the U.S. Dollar Index (DXY), currently hovering near 98.80.
Market Expectations and Economic Context
The Federal Reserve faces a careful balancing act, stimulating growth while keeping inflation near its 2% goal. Futures markets now price an 84.8% chance of another rate cut by December, likely bringing the target range to 3.75–4.00%.
Recent U.S. data shows resilience despite slowing momentum:
- Consumer confidence rose to 94.6, beating expectations.
- Home prices gained 1.6% year-on-year, signaling steady demand.
- Manufacturing remains weak, reflecting uneven recovery.
If Chair Powell confirms confidence in a “soft landing,” risk assets like stocks and Bitcoin could extend gains on renewed liquidity hopes. However, any hint of inflation concern or reduced flexibility may dampen sentiment, keeping traders cautious heading into November.
Bitcoin (BTC/USD) Technical Setup: $117K Key Breakout Zone
On the technical front, BTC/USD is holding above $112,900, testing resistance near $115,000, where a double-top pattern has formed.
The RSI is near 49, and the presence of Doji candles indicates indecision, though a hidden bullish divergence hints at accumulating buyer strength.
A breakout above $117,600, the 0.618 Fibonacci level, could open targets at $120,500 and $124,150. Conversely, a drop below $112,250 may trigger a pullback toward $108,600 or $105,500.
Trade Setup: Traders may consider long positions above $113,000 with tight stops near $111,800, while short setups below $112,200 remain valid if momentum turns bearish.
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