Fed's Dollar-Weakening Pivot Could Propel Bitcoin Toward $120K Milestone

The U.S. Federal Reserve’s decision to cut interest rates by 25 basis points on September 17, 2025, has reignited speculation that Bitcoin could test $120,000 in the near term, with 92% of traders surveyed anticipating a rate reduction. The move, widely priced in by markets, has already influenced Bitcoin’s price, which has stabilized above $115,000 amid inflows into exchange-traded funds (ETFs) and broader risk-on sentiment. Analysts attribute this to the Fed’s pivot toward accommodative policy, which typically weakens the U.S. dollar and reduces the opportunity cost of holding non-yielding assets like Bitcoin LIVE: Fed Rate Cut Decision — Bitcoin & Crypto Market …^[1].

Historical data underscores Bitcoin’s tendency to perform well during Fed rate-cut cycles. For instance, the 2020 emergency cuts, which slashed rates to near zero, catalyzed a surge from $4,000 to over $28,000 within months, driven by liquidity injections and stimulus measures. While the 2019 cuts had a muted immediate impact, sustained low rates later fueled Bitcoin’s 2020–2021 bull run. This pattern suggests that prolonged easing could create favorable conditions for Bitcoin, particularly as institutional adoption accelerates and ETFs simplify access to the asset Is Bitcoin Price Set For Next Rally? - Forbes^[2].

Current market positioning reflects heightened optimism. Bitcoin ETFs have attracted $2.68 billion in inflows over six consecutive days, with cumulative assets now exceeding $57 billion. BlackRock’s IBIT alone holds $87 billion, indicating robust institutional interest. Similarly, Ethereum ETFs have added $13.7 billion since their inception. These flows highlight a shift from high-yield bonds to riskier assets, a trend that could persist if the Fed signals additional rate cuts in 2025 Bitcoin price prediction: will BTC rise or fall after Fed …^[3].

However, risks remain. A “sell the news” scenario, where Bitcoin dips after the rate cut is confirmed, is possible, as seen in prior cycles. Technical indicators also present mixed signals. Bitcoin’s price has formed a rising wedge pattern on the weekly chart, suggesting a potential pullback to $100,000. Meanwhile, bearish divergence in the MACD and RSI metrics raises concerns about near-term weakness. Additionally, market saturation—Bitcoin’s market cap is now significantly larger than in 2019–2020—means achieving similar percentage gains requires more capital Fed Rate Cut 2025: Impact on Bitcoin Price and Crypto - Bitget^[4].

The Fed’s forward guidance will be critical. While a 25-basis-point cut is expected, dovish language hinting at further easing could extend Bitcoin’s rally beyond current levels. Conversely, a hawkish pivot, particularly if inflation remains stubborn, could limit upside. JPMorgan’s David Kelly warned that the cut might be perceived as a capitulation to political pressures, introducing new risks to U.S. financial markets and the dollar Fed Rate Cut 2025: What It Means for Crypto Investors^[5].

Regulatory developments and macroeconomic conditions will also shape Bitcoin’s trajectory. The SEC’s stance on crypto ETFs and potential rulings could either bolster or hinder institutional inflows. Meanwhile, government borrowing and inflation dynamics may keep bond yields elevated, tempering the impact of monetary easing. Despite these uncertainties, Bitcoin’s role as an inflation hedge and its growing acceptance as a portfolio diversifier position it to benefit from accommodative policy Bitcoin price prediction: will BTC rise or fall after Fed …^[6].

In the short term, Bitcoin faces key resistance at $117,000–$118,000. A breakout could retest August’s high of $124,000, with potential targets in the $130,000–$140,000 range if momentum persists. However, a bearish scenario sees support levels at $113,000 and $105,000–$110,000 under pressure. Over the next six to twelve months, Bitcoin’s performance will hinge on the breadth of the Fed’s easing cycle and the ability of real yields to decline meaningfully Fed Rate Cut 2025: Impact on Bitcoin Price and Crypto - Bitget^[7].