Bitcoin News Today: Fed's Next Move Could Tip Bitcoin's Fate Between Rally and Retreat

October 10, 2025

The U.S. Federal Reserve's anticipated rate cuts have intensified speculation about Bitcoin's potential for further gains, with markets front-running policy easing despite a resilient dollar. According to CME's FedWatch tool, the probability of a 25-basis-point reduction at the September 16–17 meeting stands at 94.2%, while prediction markets like Myriad place the chance at 88% . Analysts emphasize that while short-term volatility remains a risk, the long-term bullish outlook for Bitcoin hinges on liquidity expansion and macroeconomic trends.

Federal Reserve Chair Jerome Powell's post-meeting remarks and forward guidance will be pivotal in shaping market reactions. A dovish tone could reinforce risk-on sentiment, with Bitcoin's three-month performance showing a 62% likelihood of a 16.50% average gain post-cut . Conversely, a hawkish surprise or a lack of meaningful downward revisions to the Fed's dot plot-projecting future rate paths-could trigger a pullback in altcoins due to elevated open interest . HashKey Capital estimates Bitcoin could reach $700,000 by 2035, assuming a 10% annual growth in gold prices, underscoring a macro narrative where Bitcoin and gold converge as inflation hedges .

The U.S. Dollar Index (DXY) has recently weakened, falling to a 40-year low in June 2025, easing financial conditions and boosting liquidity for risk assets . A weaker dollar typically benefits Bitcoin, which is often viewed as a store of value against fiat devaluation. However, short-term liquidity pressures emerged as investors rotated into U.S. Treasuries, temporarily compressing crypto markets by $90 billion . This dynamic highlights the dual role of the dollar: acting as both a headwind and a tailwind for Bitcoin, depending on the timing of Fed action and global capital flows.

Historically, Bitcoin's response to rate cuts has been mixed in the short term but consistently bullish over three months. The 2019 and 2020 cycles saw Bitcoin rally following sustained easing, particularly after the 2020 pandemic-driven cuts. While the initial 2020 drop erased $4,000 in value, subsequent stimulus measures propelled prices to record highs . For 2025, institutional adoption-bolstered by ETF inflows-has added structural support. Ethereum and altcoins, meanwhile, face steeper challenges, with smaller tokens vulnerable to sharper corrections if risk appetite wanes .

Despite the bullish case, several risks could dampen Bitcoin's ascent. Stagflation concerns persist as inflation remains above the Fed's 2% target, and a weaker labor market adds complexity to policy decisions . Regulatory developments, such as SEC rulings on crypto ETFs, could sway sentiment either positively or negatively. Additionally, macroeconomic headwinds, including a stronger dollar and potential policy missteps, remain critical variables .

The coming weeks will test Bitcoin's resilience as markets await the Fed's decision and Powell's commentary. A confirmed rate cut could extend Bitcoin's rally, particularly if institutional inflows continue and the dollar weakens further. Conversely, a pause in easing or hawkish signals could reignite volatility. Analysts at The Kobeissi Letter argue that Bitcoin's "straight-line higher" price action reflects markets pricing in long-term gains, but short-term fluctuations are inevitable . With October traditionally a seasonally strong period for equities and crypto, investors remain cautiously optimistic about a sustained bull run into 2026 .

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BeInCrypto, [2] Fed Rate Cut 2025: What It Means for Crypto Investors (https://beincrypto.com/learn/fed-rate-cut-crypto-impact/)

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Economic Briefing, [4] When Is the Next Crypto Bull Run? 2025 Outlook Explained (https://www.ebc.com/forex/when-is-the-next-crypto-bull-run-2025-outlook-explained)

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