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Fed Rate Decision Could Make or Break Bitcoin’s Long-Term Bull Trend
Crypto Investors Monitor Powell – Cryptocurrency and traditional finance (TradFi) investors are closely watching this week’s U.S. Federal Reserve interest rate decision, which could define the long-term trajectory for risk-on assets like Bitcoin. The September 17 rate cut announcement comes at a pivotal moment as the S&P 500, Bitcoin, and gold hover near all-time highs, creating heightened market anticipation.
Market Expectations: A Quarter-Point Cut Likely
According to CME’s FedWatch tool, the odds of a 25 basis point rate cut are currently around 94%, with prediction platform Myriad placing the probability at 88%. Analysts suggest that while a quarter-point cut could support long-term bullish momentum for assets such as Bitcoin, the short-term market reaction will largely hinge on Fed Chair Jerome Powell’s briefing.
Dot Plot and Altcoin Volatility
Experts note that the dot plot, reflecting policymakers’ short-term rate projections, will be a key signal. A cut without a significant downward revision may trigger altcoin pullbacks, while aggressive revisions could spark rallies in large and mid-cap altcoins, according to Xu Han of HashKey Capital.
Speculative Activity and Stretched Valuations
The anticipation of a rate cut has reignited speculative trading, pushing valuations higher across multiple asset classes. Derek Lim of Caladan cautioned that even a modest hawkish surprise from Powell could complicate the Fed’s price stability mandate, highlighting the fine balance between short-term volatility and long-term opportunity.
Bitcoin’s Long-Term Outlook
Despite near-term fluctuations, Bitcoin’s three-month post-rate cut performance historically shows bullish outcomes 62% of the time, with an average gain of 16.5%, per Caladan. HashKey Capital projects Bitcoin could reach $700,000 by 2035, drawing comparisons to gold’s growth trajectory. Market analysts like The Kobeissi Letter anticipate short-term volatility but suggest that long-term asset holders may benefit, particularly with interest rate cuts coinciding with rising inflation and the ongoing AI Revolution.
Currently, Bitcoin trades just under $115,000, down 0.8% over the past 24 hours, as the market braces for the Fed’s decision.
