Bitcoin Breaks $117K as Fed Easing Reshapes Its Macroeconomic Role

Bitcoin’s price surged past $117,000 on September 17, 2025, as the U.S. Federal Reserve announced a 25-basis-point rate cut, marking a pivotal shift in the cryptocurrency's macroeconomic narrative. The decision, which reduced the upper bound of the federal funds rate to 4.25%, eased financial conditions and weakened the U.S. dollar, boosting risk appetite across global markets. The crypto market, particularly Bitcoin and Ethereum, reacted strongly to the Fed’s move, with Bitcoin experiencing a sharp sell-off to $114,800 followed by a rapid rebound toward $118,000.

Analysts suggest that the rate cut is a positive catalyst for Bitcoin, which has historically shown sensitivity to monetary policy shifts. The cut aligns with weakening labor market data, including only 22,000 payroll gains in August 2025 and rising unemployment, prompting market participants to price in further easing. CME FedWatch data indicates an 88% probability of a 25-basis-point cut, with additional cuts expected by year-end. This easing environment is seen as favorable for Bitcoin, as it reduces capital costs and supports broader risk-on sentiment.

Technically, Bitcoin is now testing key resistance levels near $117,500. A breakout above this level could signal renewed bullish momentum and set the stage for a potential rally toward $120,000 and beyond. Chart analysis shows that the price has been forming an ascending channel, with the $117,500 level marking the upper boundary. Traders are closely watching whether a candle can open above this threshold to confirm a breakout. Meanwhile, the Stochastic RSI and RSI indicators suggest positive momentum, with the RSI crossing above a downtrend line and the Stochastic RSI approaching the 50.00 level, hinting at possible upside continuation.

The broader market context also supports a bullish outlook. ETF inflows into Bitcoin have remained robust, with over $928 million absorbed in the past week, reflecting strong institutional and retail demand. Ethereum and altcoins also benefited, with ETH surpassing $4,550 and Solana rising more than 7%. However, Bitcoin faces resistance near $116,000, where sellers have pushed back against the recent rally. Derivatives data suggests that caution remains among traders, with some analysts warning that a rejection at this level could trigger a pullback to $111,000 or $110,000.

Looking ahead, the Fed’s upcoming decision on September 17 is seen as a key event. A confirmed rate cut would likely act as a catalyst for Bitcoin to reclaim its all-time high. Analysts project that if BTC breaks above $116,000, the next target would be $118,000, with $124,000 as a potential long-term level. Meanwhile, altcoins continue to attract speculative interest, with some traders shifting their focus to high-growth projects like MAGACOIN FINANCE, which analysts predict could deliver returns of up to 300x in the short term.

Bitcoin’s performance in Q3 2025 has also underscored a notable shift in its correlation structure. Recent macroeconomic analysis reveals that Bitcoin is becoming less tied to global growth expectations and more influenced by monetary policy and the U.S. dollar. This divergence from traditional equity benchmarks like the S&P 500 means traders must now focus more on central bank actions and currency movements rather than relying solely on traditional macroeconomic indicators.

The Fed’s rate cut and the broader macroeconomic environment highlight Bitcoin’s evolving role as both a digital store of value and a hedge against macroeconomic volatility. With central banks expected to continue easing in 2025, the cryptocurrency may see further gains, particularly if the U.S. dollar remains under pressure and risk appetite remains high.