Bitcoin Soars Past $117K Milestone as Fed’s First 2025 Rate Cut Ignites Market Frenzy
Digital gold surges on monetary policy pivot
The Federal Reserve's inaugural 2025 rate cut sends shockwaves through crypto markets—Bitcoin breaches $117,000 as traders celebrate the liquidity injection. Traditional finance veterans scramble to explain how their 2% bonds just got demolished by a decentralized asset.
Market mechanics unleashed
Lower rates trigger capital flight from yield products into risk assets—Bitcoin's fixed supply makes it the ultimate beneficiary of cheap money policies. Institutional flows accelerate as pension funds and corporate treasuries chase the orange pill.
The irony isn't lost
Wall Street's monetary policy now fuels its greatest disruptor—the very system meant to stabilize traditional markets just turbocharged their digital replacement. Maybe next time they'll think twice before printing trillions.
Fed rate cut improves liquidity outlook
The Federal Open Market Committee voted 11-1 on Sept. 17 to lower the federal funds rate by 25 basis points to a 4.00%–4.25% range. This marks the first reduction since December 2024, driven largely by rising unemployment, which hit 4.3% in August, the highest since 2021.
Chairman Jerome Powell referred to the action as “risk management,” indicating that employment concerns now outweigh inflation risks, even though inflation remained above target (headline CPI at 2.9% and core at 3.1%). The cut weakened the U.S. dollar, lifted equities, and pushed crypto markets higher.
Commenting on the impact on digital assets, Andrew Forson, President of DeFi Technologies, told crypto.news:
“There will be continued inflows into innovation and tech-related businesses since the returns they stand to offer will be considerably higher than less risky government-backed fixed income instruments, whose return profiles will be reduced.”
Forson also noted that staking-focused digital asset projects are becoming increasingly attractive compared to traditional fixed-income instruments, as they offer both yield generation and potential capital appreciation.
Bitcoin price technical analysis
From a technical perspective, bitcoin is trading inside the upper half of its Bollinger Bands, with resistance near $118,700 and support around $112,900. At 62, the Relative Strength Index indicates neutral momentum but is moving toward overbought territory.
The 10-day and 20-day moving averages are both below the current price, indicating that the short-term trend is still bullish. The MACD also shows a buy signal, though momentum indicators such as Stochastic RSI and Williams %R suggest caution as they hover NEAR overbought levels.
In a bullish scenario, a break above $118,700 might open the door for a retesting of the mid-August high of $124,128. If Bitcoin is unable to maintain $115,000, the 100-day SMA, which is close to $111,600, will be the next support.
