Bitcoin surged to a four-week high above $117,000 on Wednesday as markets prepared for the Federal Reserve’s policy decision on interest rates. Traders are bracing for potential swings in price before and after the announcement.
According to CME’s FedWatch tool, there is a 96% chance of a 25 basis point (bps) cut and a 4% chance of a 50 bps cut. Betting platform Polymarket showed similar sentiment, with a 93% probability of a 25 bps cut and 5% odds for a 50 bps cut. Both indicators suggest that traders expect multiple rate cuts by the end of the year.
Some analysts, however, believe much of this has already been factored into Bitcoin’s current price.
Focus on Powell’s Speech
Attention now turns to Federal Reserve Chair Jerome Powell, who will speak following the FOMC meeting. Powell has previously hinted that rate cuts may be needed due to inflation and labour market conditions.
Private wealth manager Swissblock said in a post on X that markets have already priced in the 25 bps cut, but traders will focus on Powell’s tone for further clues.
“Either way, volatility is guaranteed,” Swissblock noted, adding that Bitcoin’s Risk Index will show whether the bullish momentum can hold or if a sell-off is likely.
Resistance at $118K in Sight
Analysts see $118,000 as the key resistance level for Bitcoin.
Crypto analyst AlphaBTC predicted that BTC could touch $118,000 before retracing once the Fed decision is confirmed. For Bitcoin to continue its upward move, the level must be flipped into support.
Jelle, another analyst, highlighted the same zone as crucial. “Break 118K and hold above it, and new all-time highs are next,” he said.
Michael van de Poppe, founder of MN Capital, also noted Bitcoin was testing the $117,500–$118,500 resistance zone. He suggested a breakout could send BTC to $120,000 and possibly to its all-time high of $124,500.
On the downside, Bitcoin’s support lies between $116,800 and $114,500 — a range it has held since 10 September. If that breaks, a retest of the $112,000 level, which aligns with the 100-day simple moving average, could follow.
