Bitcoin's Fate May Ride on Fed's Pen as Bulls Eye $200K

Bitcoin’s price has hovered near $113,000, with market participants turning their attention to the U.S. Federal Reserve’s upcoming policy decision on September 17. Tom Lee, managing partner at Fundstrat Global Advisors, has reiterated a bullish stance, stating that Bitcoin “could easily reach $200,000 by the end of the year” if the Fed proceeds with significant rate cuts. Lee emphasized that cryptocurrencies are highly sensitive to monetary policy, making the Fed meeting a key catalyst for potential price movement [1]. Similarly, Sean Dawson of Derive suggested a 23% chance that Bitcoin could rise to above $140,000 by year-end, with Ethereum potentially seeing a 60% increase to $7,000 [1].

The market is currently pricing in an 88% probability of a 0.25% rate cut and a 12% chance of a larger 0.5% cut, according to the CME FedWatch tool. Recent soft U.S. jobs data, including a lower-than-expected August payroll figure, has heightened speculation about a more aggressive easing move [1]. According to Polymarket, the odds of a 0.5% rate cut have risen from 10% late last week to 18% by Monday [1]. Illia Otychenko of CEX.IO noted that a 0.25% cut is already largely priced into the market, but a larger surprise cut could introduce significant volatility [1].

However, some analysts caution against over-optimism. Rachael Lucas of BTC Markets noted that institutional profit-taking and relatively flat ETF inflows are currently capping Bitcoin’s upward momentum. Despite softer macroeconomic indicators, she pointed out that the market is already pricing in some degree of Fed easing, which may limit the immediate impact of the rate cut [2]. Vincent Liu of Kronos Research added that a rate cut may reflect economic weakness and that without stronger ETF flows or liquidity expansion, breaking above $120,000 remains challenging [2].

Bitcoin’s spot ETFs have seen notable inflows, with $368 million entering on Monday alone and $1.1 billion over the past 10 days. This trend has continued into the current week, with $246.42 million added last week, though flows remain below the record levels seen in July [1][3]. Institutional demand has remained strong, with Japanese firm Metaplanet recently acquiring 136 BTC and El Salvador adding to its holdings. These moves signal growing confidence in Bitcoin as a long-term asset [3].

Looking ahead, analysts recommend watching both on-chain and off-chain indicators. On-chain metrics show stablecoin supply near record levels, while exchange balances for Bitcoin and Ethereum continue to decline, reducing near-term selling pressure. Off-chain, regulatory developments such as potential harmonization between the SEC and CFTC, as well as ETF flow data, will remain important sentiment drivers [2]. With Bitcoin holding above key support levels and showing signs of consolidation, the coming weeks will be critical in determining whether the market can build momentum toward a potential breakout above $116,000 and beyond [3].

Source:

[1] Tom Lee Says Fed Catalyst to Propel Bitcoin to $200K USD (https://www.dlnews.com/articles/markets/tom-lee-says-fed-catalyst-to-propel-bitcoin-to-200k-usd/)

[2] Bitcoin Stalls Around $110,000; Fed Rate Cut May Not Spark Rally (https://www.theblock.co/post/369743/bitcoin-rate-cut-may-not-spark-rally)

[3] Bitcoin Bulls Eye $116K as Fed Rate Cut Bets Trigger Breakout Hopes (https://bravenewcoin.com/insights/bitcoin-btc-price-prediction-bitcoin-bulls-eye-116k-as-fed-rate-cut-bets-trigger-breakout-hopes)