Bitcoin Price Faces Crucial Resistance Amid Fed Rate Cut Speculation
Bitcoin (BTC) traders are bracing for volatility this week as the cryptocurrency approaches a significant resistance level near $117,000 ahead of the US Federal Reserve’s anticipated interest rate decision. Data from Cointelegraph Markets Pro and TradingView indicate that BTC has consistently encountered rejection around this mark, making it a focal point for market participants.
Crypto investor Ted Pillows emphasized the importance of reclaiming this zone, stating on X (formerly Twitter) that failure to surpass $117,000 could increase the probability of a correction toward $113,500 or lower. Supporting this, data from CoinGlass shows a large volume of sell orders just above $117,000, creating a liquidity barrier.
Federal Reserve Rate Cut Expected to Influence Market Dynamics
Market consensus predicts the Federal Open Market Committee (FOMC) will cut interest rates by 0.25% at its Wednesday meeting—the first reduction in 2025. There is also a marginal possibility of a 0.5% cut, according to CME Group’s FedWatch Tool. The decision is occurring under unusual circumstances, as the Fed historically seldom cuts rates with stock markets near all-time highs.
The rate cut aims to address weakening labor market conditions despite persistent inflation concerns. Analysts from Mosaic Asset Company highlight that the Fed’s focus has shifted toward labor market support, with the market pricing in multiple rate reductions ahead.
Trading resource The Kobeissi Letter notes that rate cuts amid rising inflation and technological advancements like the AI revolution could fuel risk assets, including Bitcoin and gold, which have already shown sustained upward trajectories.
Bitcoin Bull Market Peak May Be Imminent
Debate continues over the timing of the current Bitcoin bull market peak. Some traders anticipate a retest of lower support levels before further gains, while others expect a final surge into new all-time highs.
Joao Wedson, CEO of crypto analytics firm Alphractal, cited his Max Intersect SMA model—known for its historical accuracy in predicting BTC cycle tops—which has yet to signal a peak but indicates it may be just weeks away, with a target around $140,000. Similarly, a recent golden cross in the MACD indicator suggests a potential $160,000 target in the near term based on historical patterns.
Binance Data Points to Large-Volume Bitcoin Buying
Onchain analytics from CryptoQuant reveal increased buying pressure on Binance over the weekend, as indicated by a spike in the Binance Scarcity Index. This index rises when immediate buying demand surpasses available supply, often preceding price rallies. A similar pattern in June coincided with Bitcoin climbing to approximately $124,000.
However, CryptoQuant cautions that short-term spikes in the index can be followed by consolidation phases, emphasizing the need for sustained activity to confirm a bullish trend.
Institutional Demand Outpaces Newly Mined Bitcoin Supply
Institutional investors continue to drive Bitcoin demand, particularly through US spot Bitcoin ETFs, which recorded net inflows of $2.3 billion last week. On September 10 alone, ETFs added 5,900 BTC—the largest single-day inflow since mid-July.
Keith Alan, co-founder of Material Indicators, suggests that this robust institutional appetite could propel Bitcoin to new all-time highs. Supporting this, Andre Dragosch of Bitwise calculated that last week’s institutional inflows were nearly nine times greater than the amount of new BTC mined, signaling significant supply absorption.
This article does not constitute investment advice. Trading and investing involve risks, and readers should conduct their own research before making decisions.
FinOracleAI — Market View
Bitcoin’s price action this week is likely to be heavily influenced by the Federal Reserve’s anticipated rate cut. The expected 0.25% reduction could provide a short-term boost to risk assets, including BTC, by improving liquidity and investor sentiment. However, the resistance near $117,000 and significant sell-side liquidity present immediate obstacles.
Institutional demand, especially through ETFs, remains a strong positive driver, absorbing new supply and potentially underpinning higher prices. The recent surge in large-volume buying on Binance further supports this bullish case, though short-term volatility and possible corrections cannot be ruled out.
Investors should watch the Fed’s official communication for guidance on future monetary policy, as well as Bitcoin’s ability to break and sustain above key resistance levels. Failure to do so may trigger downward pressure toward $113,000 or lower.
Impact: positive
