TLDR:
- Fed decision could trigger volatility before a potential Bitcoin rally, traders eye $112K as a key level
- Markets price 96% chance of 25bps rate cut, setting stage for cheaper capital and renewed crypto momentum
- Analysts warn of short-term sell-offs before Bitcoin pushes higher, mirroring previous Fed cut reactions
- Altcoins expected to follow Bitcoin as traders prepare for post-rate-cut rally across crypto markets
Crypto traders are on alert as the Federal Reserve meets to decide interest rates. Markets are betting on a quarter-point cut. Some analysts see this as the fuel Bitcoin needs for its next leg up.
Others warn of near-term turbulence before prices climb again. All eyes are on whether crypto can repeat its rally after the last rate cut.
Bitcoin Price Eyes $112K on Fed Decision
Lark Davis said on X that traders have priced a 96% chance of a 25-basis-point cut at the meeting.
He noted that cheaper capital often boosts risk assets like crypto. He cautioned that markets rarely move in a straight line and warned of possible “sell-the-news” volatility before prices recover.
The FOMC meeting is tomorrow.
Markets are pricing a 96% chance of a 25bps cut – with just 4% odds for 50bps.
Here's why it matters:
Rate cuts = Cheaper capital
And cheaper capital is what fuels risk assets like crypto.
But keep in mind that markets don't move in a straight… pic.twitter.com/iXZh5GGa0X
— Lark Davis (@TheCryptoLark) September 16, 2025
Trader Sykodelic pointed out that Bitcoin surged 77% in the three months following the last 50bps cut in 2024. He said the current market setup looks nearly identical, with Bitcoin consolidating for two months.
According to him, the lack of pre-cut rally could make this reaction even stronger.
He suggested that $112.5K could be a short-term floor if Bitcoin drops before moving higher. He added that altcoins could see new highs as liquidity enters the market. Historical data show that rate cuts during stock market highs often lead to higher equity prices a year later.
Analysts say this combination of cheaper borrowing costs and strong risk appetite may create the conditions for a broader crypto move. They expect short-term volatility as traders reposition for the new rate environment.
The last time the FED cut rates the market pumped very hard.
So I honestly do not understand why so many people are bearish about rate cuts?
We are quite literally, almost to the day, in the exact same position we were last time the FED cut rates.
IF we had been mega pumping… pic.twitter.com/OWVDcwgnZY
— Sykodelic
(@Sykodelic_) September 16, 2025
Crypto Market Prepares for Volatile Trading
The setup has investors preparing for quick price swings. Many traders plan to buy dips if Bitcoin sells off on the announcement. They see the Fed move as a longer-term bullish driver, even if the initial reaction shakes out weak hands.
Spot market data shows Bitcoin holding near key support levels ahead of the decision. Analysts believe a break below could trigger liquidity hunts before prices bounce. The market’s open interest and funding rates suggest traders are positioned for upside but remain cautious.
Altcoin traders are also watching closely. If Bitcoin breaks higher, capital rotation into smaller tokens could accelerate. That scenario could push the total crypto market cap to fresh highs.
Still, traders warn that price action could be messy in the hours following the Fed statement. They advise patience and close monitoring of volume during the first moves after the cut.
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