With the Federal Reserve expected to announce a significant rate cut on Wednesday, Bitcoin’s price could experience major volatility. This decision might be the signal that drives Bitcoin’s next upward move.
Fed Rate Cut Expectations Increase
The possibility of a 50 basis point rate cut in the Federal Reserve’s upcoming FOMC meeting has surged recently. Market sentiment has shifted, and now there’s a 69% chance of a larger cut than previously expected. Fed Chair Jerome Powell had forecast a more modest cut, but new economic data has changed the outlook.
Adding to the pressure, U.S. Democratic senators have urged the Federal Reserve Board to implement a 75 basis point rate cut due to rising unemployment. Since July, the unemployment rate has increased from 3.5% to a decade-high of 4.2%, while inflation continues to decrease. This economic backdrop is the main reason for the call for aggressive monetary policy action.
Bitcoin Volatility Expected
Bitcoin’s price is likely to see significant volatility ahead of the Fed’s announcement. Although short-term movements may fluctuate, a major rate cut could be a decisive factor in Bitcoin’s long-term price direction. If the cut is larger than anticipated, it may pave the way for a sustained Bitcoin rally.
Bitcoin’s Short-Term Correction
In the short term, Bitcoin experienced a small correction, falling through its ascending trend line. However, the price was supported at the 0.382 Fibonacci retracement level, indicating strong buying interest at lower prices. Now, Bitcoin bulls are eyeing a push above the local high of $65,050, which would establish a new higher high and break the local downward trend.
Is Bitcoin Ready to Rally?
When taking a broader view of Bitcoin’s price action, it seems poised for a significant upward move. The market has spent the last six months consolidating after a massive rally. This consolidation forms a bullish flag pattern, and if Bitcoin breaks to the upside, it could trigger a surge toward $100,000 or even $150,000 by the end of 2025.
