Bitcoin Price Analysis: BTC Crosses $117,000 As Fed Announces Rate Cut
Bitcoin (BTC) had a muted response to the Federal Reserve’s announcement of a 25-basis point interest rate cut as it fell to an intraday low of $114,724. However, the flagship cryptocurrency has rebounded to reclaim the $117,000 mark and is currently trading around $117,500.
While most analysts expect prices to push higher, one prominent analyst has warned of a crash towards $100,000.
Federal Reserve Announces Quarter-Point Interest Rate Cut
The Federal Reserve has cut interest rates by 25 basis points and left the door open for more cuts. The first rate cut of 2025 takes interest rates down from a range of 4.25%-4.50% to 4%-4.25%. The Fed also stated that markets could expect further rate cuts. However, Fed Chair Jerome Powell did not outline a clear path forward, saying that the Fed would retain its flexibility and act according to the prevailing macroeconomic situation. Despite the rate cut, Powell highlighted rising concerns around employment and economic growth. According to reports, one member of the FOMC, Trump appointee Stephen Miran, dissented, arguing for a more aggressive 50 bps rate cut.
Interest rates have a significant impact on asset prices, with lower interest rates reducing yield from fixed-income assets, including bonds and treasuries. However, they reduce the cost of borrowing, making riskier assets attractive to investors.
Bitcoin Mining Industry Could Be Finished In Two Years: Bit Digital CEO
Bit Digital CEO Sam Tabar believes the Bitcoin mining industry will not exist in two years because the economics of profit and loss will no longer make sense from a business perspective. However, he stated that Bitcoin mining will continue.
“There’s no way the mining industry can survive another halving and then, at the same time, the sovereigns get into, start participating in Bitcoin mining.”
Bit Digital pivoted to Bitcoin mining in 2018 after a clampdown on P2P lending in China. The company announced in June that it plans to wind down its Bitcoin mining infrastructure across the US, Canada, and Iceland, and redirect funds towards its Ethereum treasury strategy.
“A few years went by, and we realized — and I think the other miners are finally realizing this- that that is a very shitty business.”
Tabar stated that the last block reward halving “was a disaster,” and predicted that the next halving will be the end for several miners. As prices push higher, Tabar believes sovereign nations will move in to mine Bitcoin at scale and add it to their balance sheets.
“It doesn’t cost them anything to mine Bitcoin because they have free access to power, unlike Bitcoin miners.”
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) bounced back to reclaim $117,000 after a muted response to the rate cut by the Federal Reserve. The flagship cryptocurrency faced volatility on Monday before rising 1.26% on Tuesday to $116,832. The price fell to an intraday low of $114,724 on Wednesday before reclaiming $116,000 and settling at $116,484. The current session sees the price up over 1%, trading around $117,730.
Jerome Powell announced the first rate cut of 2025 on Wednesday. While markets had fully priced in the rate cut, investors were focused on the Fed’s tone and what it could potentially indicate for the future. Powell highlighted risks to growth and employment, stating that there could be more cuts before the end of the year. Powell’s stance suggests a dovish tone, and markets will be closely watching the direction the Fed takes. Shawn Young, chief analyst at MEXC, stated,
Farzam Ehsani, CEO of cryptocurrency exchange VALR, suggested BTC could continue facing macro pressures.
“Bitcoin’s relative underperformance against Gold and the S&P 500 highlights the current shift in market dynamics… investors are very selective about where they deploy their capital now.”
Meanwhile, Arthur Azizov, founder of B2 Ventures, believes market reaction to the rate cut could boost Bitcoin and prominent altcoins, or lead to a “sell the news” event.
“Altcoins are even more sensitive. Solana, now above $230, looks strong but faces heavy resistance near $240-250, while XRP is defending the $2.90-$3.00 zone. The problem is liquidity: unless fresh inflows arrive, traders tend to rotate back into Bitcoin during uncertainty.”
BTC registered a sharp drop on Wednesday despite the announcement of a rate cut as it struggled to stay above the $115,000 mark. The cryptocurrency market’s immediate reaction to the rate cut was relatively muted, with traders and market investors digesting the bank’s cautious stance. The FOMC stated that job gains had slowed, unemployment had moved higher, and inflation remained at elevated levels. The Fed also acknowledged that the downside risk to employment had risen, leading to a dovish policy stance.
BTC faced volatility over the past weekend as it reached an intraday high of $113,390 on Friday (September 5). However, it failed to stay at this level and settled at $110,670, ultimately registering a marginal decline. Sellers retained control on Saturday as the price fell 0.41%. BTC recovered on Sunday, rising nearly 1% to end the weekend at $111,129. The price continued pushing higher on Monday, rising 0.85% to cross $112,000 and settle at $112,072. However, it lost momentum on Tuesday, dropping 0.47% to $111,547. Positive sentiment returned on Wednesday as BTC rallied, rising over 2% to cross $113,000 and settle at $113,983.
Source: TradingView
Buyers retained control on Thursday as BTC rose 1.37%, crossing $115,000 and settling at $115,540. The price continued pushing higher on Friday, rising 0.49% to cross $116,000 and settle at $116,106. Despite the positive sentiment, price action turned negative over the weekend as BTC registered a marginal decline on Saturday and fell 0.56% on Sunday, ending the day at $115,314. BTC faced volatility on Monday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand as the price registered a marginal increase. BTC registered a sharp increase on Tuesday, rising over 1% to cross $116,000 and settle at $116,382. The price fell to an intraday low of $114,724 on Wednesday. However, it rebounded from this level to reclaim $116,000 and settle at $116,484, ultimately dropping 0.30%. Positive sentiment has returned during the ongoing session, with the price up over 1%, trading above $117,000 at $117,750.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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