FOMC Meeting: What Does the Federal Reserve’s September Rate Cut Mean for Bitcoin?

The Federal Reserve is back in focus as today’s Federal Open Market Committee (FOMC) meeting could bring the first rate cut of 2025, and traders are closely watching what it could mean for the Bitcoin price.

Markets are heavily leaning toward a rate cut at this week’s Federal Open Market Committee (FOMC) meeting.

Data from CME’s FedWatch tool shows a 96% probability that the Fed will reduce its benchmark rate by 25 basis points.

There is also a small, 4% chance that policymakers could move more aggressively, opting for a 50-basis-point cut instead.

(Source – CME Group)

The Fed kept interest rates at 5.5% for more than a year, holding steady from July 2023 through August 2024.

Cuts began in August and ran through December, lowering the rate to 4.5%. Since then, policy has been on pause.

(Source – Trading Economics)

Polymarkets forecasts a 91% chance of a 0.25% cut, a 7% chance of a 0.5% cut, and only a 3% chance of no change. In other words, investors are almost certain that September will mark the Fed’s first rate adjustment of the year.

(Source – Polymarket)

What was Bitcoin Response to Previous Rate Cut?

The Federal Reserve’s last rate cut cycle left a clear mark on Bitcoin’s price. The reduction news, which coincided with the asset bottoming out in September 2024, in turn triggered a rally that has since characterized the market.

Bitcoin has since increased two times over. The bulk of profits was also made in a relatively short time, in the period between September and December 2024, which highlights the close correlation between the monetary policy of the tightening and the performance of the coin.

The initial response of the market to the move made by the Fed was mixed. The central bank took a step bigger than they thought, cutting by half a point on September 19, 2024, and leaving the investors shocked.

Even with that unexpected move, Bitcoin closed the day with only a modest +1% gain.

Momentum carried for a week before fading. The price slipped back toward pre-announcement levels, then regained its broader uptrend in the weeks that followed.
Later cuts had a steadier impact. Moves on November 7 and December 17 pushed Bitcoin to new highs.

Analysts caution that the rally in November was not only about rates the timing also overlapped with Donald Trump’s election win, which added to the upward pressure.

DISCOVER: Top 20 Crypto to Buy in 2025

Bitcoin Price Prediction: How Can the FOMC Decision Impact Bitcoin’s Next Move?

Crypto analyst Daan Crypto posted Bitcoin’s short-term chart, which shows classic stop hunts ahead of the FOMC decision.

$BTC Commence the low timeframe stop hunts of overleveraged positions trying to pre-position into FOMC.

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