Traders Eye Federal Reserve Decision
Bitcoin (BTC) and Ethereum (ETH) prices held steady on Tuesday as traders prepared for the Federal Reserve’s key rate decision on Wednesday. Analysts say the outcome could shape risk appetite for the rest of 2025, making it one of the most closely watched events for crypto markets this month.
Matt Mena, crypto research strategist at 21Shares, said the focus isn’t just on whether the Fed cuts rates, but on the size of the cut.
“The base case is a 25-basis-point cut, but a surprise 50-basis-point move could trigger a powerful rally across risk assets, including crypto,” Mena said.
Market Expectations: 25 bps vs. 50 bps
Data from CME FedWatch shows traders are overwhelmingly positioned for a 25-basis-point move, while prediction markets like Polymarket still assign a small probability to a 50 bps cut.
Mena noted that up to $7.5 trillion parked in money market funds could start rotating back into equities and crypto as yields drop, creating a “powerful incentive” for capital to flow into alternative assets.
Bitcoin and Ethereum Price Levels
Ahead of the Federal Open Market Committee (FOMC) meeting, bitcoin hovered in the $115,000–$116,000 range, while ether traded sideways. Analysts caution that volatility could spike immediately after the announcement.
“The rally remains fragile ahead of the FOMC,” said Timothy Misir, head of research at BRN. He warned that lighter hedging and leveraged positions could amplify the post-Fed move in both directions.
Institutional Flows Back in Play
Despite the cautious sentiment, inflows into crypto ETFs have strengthened. U.S. spot bitcoin ETFs recorded six consecutive days of net inflows totaling $260 million as of September 15. Spot ether products also saw $360 million in five straight days of positive flows — signaling renewed institutional interest after a slow August.
Kyle Rodda, senior market analyst at Capital.com, noted that U.S. equities have already rallied to fresh highs in anticipation of rate cuts. However, he warned that a “measured, cautious and less dovish” Fed could briefly weigh on risk assets, strengthen the U.S. dollar, and stall crypto prices.
Seasonal Trends Suggest More Upside
Historically, September has been a tough month for BTC and ETH, but Q4 tends to bring renewed bullish momentum for cryptocurrencies and risk assets.
Dr. Sean Dawson, head of research at Derive.xyz, called September’s sideways action a “breather” rather than the top of the rally. He highlighted that BTC call options show open interest concentrated at $140,000–$200,000 strikes, while ETH options imply growing expectations of a $5,000–$6,000 year-end target.
Dawson cautioned that these price targets depend on the Fed’s policy easing and continued demand for crypto ETFs.
