Bitcoin Approaches Key Resistance as Fed Rate Cut Becomes Imminent
Bitcoin (BTC) surged past $117,000 on Wednesday, marking its highest level in four weeks as traders brace for significant market movement surrounding the Federal Reserve’s anticipated interest rate cuts.
Fed Rate Cut Odds Reach Near Certainty
According to CME Group’s FedWatch tool, there is a 96% probability that the Federal Open Market Committee (FOMC) will implement a 25 basis points cut in the upcoming meeting, with a smaller 4% chance of a 50 basis points reduction. Polymarket’s betting data corroborates this outlook, showing a 93% likelihood for a 25 bps cut and 5% for a 50 bps decrease.
Market participants are factoring in a possible trajectory of three rate cuts before the end of the year. However, some analysts caution that the current price volatility may already reflect these expectations.
Focus on Powell’s Post-Meeting Communication
All eyes are on Federal Reserve Chair Jerome Powell’s comments following the FOMC announcement. Powell, under political pressure to lower rates, has previously indicated that inflation levels and labor market conditions warrant adjustments. Traders will scrutinize his tone for any signals regarding the Fed’s future policy stance.
Swissblock, a private wealth management firm, emphasized that volatility is inevitable regardless of the outcome, noting that Bitcoin’s risk index will be instrumental in determining whether the bullish momentum sustains or a sell-off ensues.
Technical Outlook: Breaking $118,000 Could Unlock New Highs
Bitcoin’s immediate challenge lies in overcoming the $118,000 resistance level. Analyst Jelle highlighted that maintaining a position above this threshold could pave the way to new all-time highs. Data from Cointelegraph Markets Pro and TradingView confirm BTC is testing resistance between $117,500 and $118,500.
Michael van de Poppe, founder of MN Capital, described this price action as “a run before a drop” but suggested that surpassing $118,000 could trigger an advance toward $120,000 and potentially the previous all-time high near $124,500.
Potential Support Levels and Risks
On the downside, Bitcoin has found support in the $116,800 to $114,500 range in recent sessions. A breach below this zone could lead to a retest of the psychological $112,000 level, which also corresponds to the 100-day simple moving average.
Investors should note that all trading involves risk, and this analysis does not constitute investment advice.
FinOracleAI — Market View
The near-certain Federal Reserve rate cut is driving positive sentiment in the Bitcoin market, pushing prices toward critical resistance levels. The key determinant in the short term will be Fed Chair Powell’s commentary, which could either reinforce bullish momentum or introduce volatility. Traders should monitor the $118,000 resistance closely, as its breach may trigger a significant upward move toward all-time highs. However, downside risks remain if support levels fail to hold, especially amid broader macroeconomic uncertainties.
Impact: positive
