Bitcoin News Today: Global Dovish Shift Boosts Bitcoin Amid 88.9% Fed Cut Chance and $118K Price Rally

Central banks around the world are increasingly adopting a dovish stance, cutting interest rates to stimulate economic growth and ease inflationary pressures [4]. These moves are creating a more favorable environment for high-risk, high-return assets like Bitcoin, as lower yields on traditional savings make alternative investments more attractive [1]. Investors are beginning to shift capital from low-yield deposits into equities, gold, and cryptocurrencies, with Bitcoin emerging as a key beneficiary of this global trend [5].

While many central banks have already initiated rate cuts—such as the Bank of England, which recently cut rates to a more than two-year low [5]—the U.S. Federal Reserve has held rates steady amid strong economic data and concerns over inflation. This has kept the U.S. dollar relatively strong, limiting the urgency for American investors to pivot to assets like Bitcoin [1]. However, recent comments from Fed Governor Michelle Bowman have signaled growing support for a rate cut at the upcoming September FOMC meeting, with the probability of a reduction currently standing at 88.9% [4].

A U.S. rate cut is seen as a potential catalyst for Bitcoin’s next major price surge. Historically, periods of lower U.S. interest rates have coincided with bullish crypto markets, as reduced borrowing costs encourage leveraged positions and increased capital flows into the asset class [2]. With Bitcoin recently trading near $118,000 [1], and technical indicators suggesting it could test $120,000 and beyond [2], the market is already showing signs of anticipation for the Fed's eventual policy shift.

The impact of a U.S. rate cut could extend beyond price action. A weaker dollar could trigger a broader reallocation of global capital into risk assets, including Bitcoin. This could lead to a surge in demand from both retail and institutional investors, further amplifying the upward pressure on BTC prices [2]. In addition, a 10% rise in Bitcoin’s price could trigger an estimated $18 billion in short liquidations, highlighting the growing influence of the cryptocurrency in traditional financial markets [3].

The broader crypto market has also shown strong performance, with the sector growing by 13.3% in July as altcoins shared in the bullish momentum [6]. This suggests that the current Bitcoin rally is not an isolated event but part of a larger upward trend in the digital asset space.

Analysts suggest that the convergence of monetary policy easing, strong technical fundamentals, and rising investor sentiment is creating a powerful backdrop for Bitcoin. As central banks in the U.S. and U.K. increasingly signal a shift toward rate cuts, the conditions for a sustained bull run in Bitcoin appear to be aligning [7]. However, the market remains sensitive to macroeconomic data, with investors closely watching upcoming CPI reports for further direction [7].

Source: [1] Bitcoin News Today: Bitcoin Hits $118,000 Amid Bullish Policy Shifts and Rising Futures Open Interest (https://www.ainvest.com/news/bitcoin-news-today-bitcoin-hits-118-000-bullish-policy-shifts-rising-futures-open-interest-2508/)

[2] Bitcoin Bulls In Control: $120,000 Test Could Trigger Run (https://www.mitrade.com/insights/news/live-news/article-3-1026952-20250810)

[3] Bitcoin Near $120K As 10% Gain Could Trigger $18B in Short Liquidations (https://www.ainvest.com/news/bitcoin-news-today-bitcoin-120k-10-gain-trigger-18b-liquidations-2508/)

[4] Michelle Bowman Calls for September Fed Rate Cut (https://coingape.com/michelle-bowman-calls-for-september-fed-rate-cut/)

[5] Charting the Global Economy: A Split Bank of England Cuts (https://finance.yahoo.com/news/charting-global-economy-split-bank-090000167.html)

[6] Binance Observes Crypto Market Surge as Bitcoin and Altcoins Outperform (https://www.btcc.com/en-US/square/Binance%20News/779307)

[7] Silver (XAG) Forecast: CPI Data Could Ignite Next Rally or Trigger Pullback (https://www.fxempire.com/forecasts/article/silver-xag-forecast-cpi-data-could-ignite-next-silver-rally-or-trigger-pullback-1540208)