Bitcoin News Today: Bitcoin's $120K Defense: Powell's Dovish Signal or Hawkish Warning?

Bitcoin's price dropped below key support levels on October 9, 2025, as the U.S. dollar strengthened ahead of Federal Reserve Chair Jerome Powell's speech, according to CoinDesk. The leading cryptocurrency fell over 1% to $121,500, breaching its 200-hour moving average. This decline occurred despite robust inflows into U.S.-listed spot ETFs, which added $426 million in inflows on Wednesday. The dollar index rose to 99.10, the highest since August 1, dampening the appeal of dollar-denominated assets like Bitcoin and gold.

The Fed's September meeting minutes revealed a split among policymakers on the timing and scale of rate cuts, with concerns about persistent inflation and the risk of "flying blind" due to the U.S. government shutdown delaying critical economic data. While most officials supported further easing, a majority emphasized upside risks to inflation. The committee voted 11-1 to reduce the federal funds rate by 25 basis points, bringing the target range to around 4%. However, seven officials anticipated no further reductions, contrasting with 19 who saw at least two more cuts this year.

Powell's upcoming remarks at the Community Bank Conference on October 9 will be closely watched for clues on the Fed's policy trajectory. Traders are seeking guidance amid the government shutdown, which has paused the release of inflation and jobs data. Coingape noted that historical trends suggest Bitcoin often rallies following Powell's dovish speeches, such as the Jackson Hole address in 2023 and 2024, which preceded significant price surges. However, analysts caution that a hawkish tone could extend the current pullback, with Bitcoin's $120,000 level acting as a critical support zone.

The Fed's potential rate cuts could influence Bitcoin's liquidity-driven rallies. A 25-basis-point cut in September 2025, followed by additional easing, historically correlates with Bitcoin's upward momentum, as seen in the 2020–2021 bull run. Conversely, a pause in rate cuts or a prolonged shutdown could trigger market volatility. The September FOMC minutes highlighted labor market weakness and inflation risks, with officials warning that premature easing might destabilize inflation expectations.

Market participants are also monitoring technical indicators. Bitcoin's recent consolidation between $112,000 and $118,000, coupled with the 50-day EMA providing support near $114,800, suggests a potential breakout if the price clears $118,000. Coingape noted that Fibonacci targets at $123,000 and $126,500 could signal further gains if the Fed adopts a dovish stance. However, a failure to hold above $120,000 risks a deeper correction toward $117,000–$118,000.

Analysts remain divided on Bitcoin's near-term outlook. While some view the current dip as a healthy reset and buying opportunity, others warn of extended volatility if the Fed signals caution. The U.S. Dollar Index and Treasury yields have risen, adding pressure to Bitcoin, which historically performs better in a weaker dollar environment. As Powell's speech approaches, the market's reaction will likely set the tone for Bitcoin's trajectory in the final quarter of 2025.

Source: [1] CoinDesk (https://www.coindesk.com/markets/2025/10/09/bitcoin-slips-below-key-support-as-dollar-strengthens-ahead-of-powell-speech)

[2] Coingape (https://coingape.com/markets/bitcoin-price-prediction-post-powell-volatility-signals-another-massive-q4-rally-ahead/)

[4] Coindesk (https://www.coindesk.com/markets/2025/10/05/the-fed-s-next-move-on-oct-29-how-a-scenario-few-expect-could-derail-u-s-stocks-and-crypto)

[6] CCN (https://www.ccn.com/education/crypto/fed-sept-17-rate-cut-impact-on-crypto-housing-equities-and-beyond/)

[9] Coinpedia (https://coinpedia.org/news/fed-meeting-focus-will-jerome-powells-speech-ignite-bitcoin-rally/:~:text=Bitcoin%20dips%202%25%20to%20%24122K%20ahead%20of%20FOMC,rally%2C%20while%20hawkish%20signals%20may%20extend%20the%20pullback.)