Fed cuts interest rates by 25 basis points: how will the crypto market react? Experts predict Bitcoin is expected to break through the $120,000 mark.

The Fed announced a 25 basis point rate cut on September 17, 2025, marking the first rate cut of the year. Although the market widely anticipated this decision, experts' attention was more focused on Fed Chairman Powell's "dovish" tone and hints about future policy direction. This article will analyze the potential impact of the Fed's decision on the Bitcoin and alts markets, incorporating insights from experts in the Crypto Assets field, as well as key signals that investors should follow.

Fed cuts interest rates by 25 basis points, market focus shifts to "dovish" signals

The Fed has fulfilled the long-awaited interest rate cut decision, lowering rates by 25 basis points, marking the first rate cut of 2025. Although the rate cut on September 17 has been fully digested by the market, all attention is focused on the Fed's stance and its signals for the future. Notably, Fed Chairman Jerome Powell emphasized the risks to employment and growth and indicated that there may still be potential for further rate cuts in the future. Additionally, a member of the Federal Open Market Committee (FOMC) even called for a 50 basis point cut, further confirming the overall "dovish" shift in the Fed's position.

Bitcoin Price Outlook: Is It Possible to Break the 120,000 USD Barrier?

Crypto analyst Shawn Young stated that a 25 basis point rate cut aligns with expectations, but current market risks are higher than ever, as inflation remains elevated. However, he believes that if the Fed's "dovish" outlook can persist, accompanied by expectations of further rate cuts, this could drive capital into BTC and other blue-chip coins, allowing Bitcoin's price to potentially rise to the range of $120,000 to $125,000 in the coming weeks.

However, industry expert Farzam Ehsani is more cautious, believing that Bitcoin may continue to face macro pressures. He added that the key for Bitcoin lies in the expansion of institutional liquidity. He pointed out: "Bitcoin's poor performance relative to gold and the S&P 500 highlights the changing dynamics of the current market... Investors are now very selective when deploying funds."

Alts Face a Critical Test: How Will Liquidity Rotate?

Arthur Azizov, the founder of B2 Ventures, believes that the Fed's decision may boost Bitcoin and alts, but it could also trigger a "buy the rumor, sell the news" sell-off. This latter scenario is especially likely to occur if the market perceives the Fed's stance as not being "dovish" enough.

"Altcoins are more sensitive to market changes," Arthur Azizov said. "Solana is currently priced over 230 dollars and looks strong, but it faces strong resistance around 240 to 250 dollars; while XRP is defending the range of 2.90 to 3.00 dollars. The issue is liquidity: unless there is new capital inflow, traders tend to rotate their funds back into Bitcoin during periods of market uncertainty."

Conclusion

The Fed's interest rate cut decision has brought complex signals to the crypto market. Although the "dovish" stance provides a macro foundation for Bitcoin's potential rise, the market's digestion of this positive news and the sensitivity of alts make the short-term trend full of uncertainty. Investors should closely follow subsequent institutional liquidity trends and the rotation of market funds between Bitcoin and alts.