Bitcoin Caught in Fed's Rate-Cut Limbo as Wall Street Buys Dip

Bitcoin Price: Wall Street Buys the Dip, But Fed Uncertainty Keeps Market Stuck

Bitcoin’s price remains in a state of limbo as conflicting forces shape market sentiment. Despite a 24-hour inflow of $241 million into U.S. spot Bitcoin ETFs—led by BlackRock’s iShares Bitcoin Trust—traders are constrained by uncertainty over the Federal Reserve’s rate-cut trajectory. The cryptocurrency traded between $111,800 and $112,100 as of September 26, failing to break out of a range bound by technical resistance and macroeconomic ambiguity. Analysts describe the current environment as a “market of maybes,” where buyers and sellers remain in a tug-of-war over control of the $112,000–$113,500 range .

Wall Street’s appetite for Bitcoin has shown resilience, with institutional demand evident in ETF flows and derivatives activity. However, this optimism is tempered by the Fed’s cautious stance. Federal Reserve Chair Jerome Powell emphasized in a recent speech that policymakers are “not rushing into further easing,” framing the central bank’s actions as a “risk-management” strategy to balance inflation risks against labor market concerns. Powell’s remarks, combined with a lack of consensus among Fed officials, have kept Bitcoin’s price capped. Traders now await clarity on whether the Fed will prioritize inflation control or respond to weakening employment data .

The cryptocurrency’s struggles are compounded by broader macroeconomic pressures. Fears of a U.S. government shutdown by October 1 have amplified risk-off sentiment, triggering a $162 billion selloff in the total crypto market since September 23. Bitcoin dropped below $112,000 amid a $23 billion options expiry event, while Ethereum fell below $4,000 for the first time in seven weeks. Market participants also grapple with $1.65 billion in leveraged position liquidations, further exacerbating downward momentum .

Technical indicators reflect this indecision. The MACD and RSI, two widely used momentum tools, have produced conflicting signals. While the MACD suggests a potential bullish trend, the RSI indicates weakening momentum, with Bitcoin hovering near critical support levels. Analysts warn that a failure to reclaim $113,500 could expose Bitcoin to a slide toward $105,000–$90,000, while a breakout above this threshold could reignite a rally toward $115,000 .

Institutional adoption and regulatory developments remain long-term tailwinds. Bitcoin spot ETFs continue to attract capital, and the asset’s role as a store of value persists despite short-term volatility. However, the Fed’s delayed rate cuts and geopolitical uncertainties—such as the potential impact of tariffs on inflation—pose immediate headwinds. As one strategist noted, “Bitcoin is in a tug-of-war between macroeconomic fundamentals and technical levels, with the Fed’s next move likely to dictate the path forward” .

The market’s next catalyst will likely come from October’s economic data releases, including GDP and PCE price index reports. For now, Bitcoin remains in a holding pattern, with bulls hoping for a breakout and bears anticipating a test of key support levels. Traders are advised to monitor Fed policy signals and institutional flows, as these factors will determine whether Bitcoin can break free from its current stagnation.