The Fed has cut interest rates for the first time in nearly a year, is a Bitcoin rise expected to repeat? Analysts are optimistic about BTC reaching $210,000.

The Fed's first rate cut in nearly a year has paved the way for a potential price rise in Bitcoin. On Wednesday, the Fed lowered the benchmark interest rate by 25 basis points to a range of 4%-4.25%, a move seen as "risk management" in response to economic cooling. Although Bitcoin's short-term reaction has been mediocre, market observers are drawing on historical patterns, noting that Bitcoin has previously seen significant pumps after rate cuts. Coupled with a massive influx of institutional funds and the historic "October rise" effect, many analysts are optimistic that BTC is likely to reach new highs in the coming months, potentially hitting levels of $210,000.

Fed cuts interest rates, historical patterns indicate huge rise potential

Fed Chairman Powell described this rate cut as a response to the weak labor market and economic uncertainty. Although this decision initially only caused the Bitcoin price to rise by about 1%, analysts are closely monitoring the potential for greater pumps to follow.

Market observers compare the current situation to September 2024, when Bitcoin prices soared by 80% after the Fed cut interest rates. If history repeats itself, similar momentum could drive BTC prices close to $210,000. Research from The Kobeissi Letter analyzed 20 rate-cutting cycles since 1980 and found that the stock market typically averages a 14% rise in the 12 months following a rate cut. Although Bitcoin is not directly correlated with the stock market, it exhibits a high correlation with risk assets during periods of monetary easing, which supports the bullish outlook for cryptocurrencies.

Institutional funds continue to flow in, providing momentum for the pump.

Large-scale Bitcoin purchasing activity continues, further reinforcing the narrative of institutional adoption. According to reports, on September 16, an independent crypto wallet bought $680 million worth of BTC, indicating that well-capitalized buyers are showing strong confidence at the current price levels. Meanwhile, Bitcoin ETFs listed in the U.S. continue to attract inflows from traditional finance.

This institutional demand has added new momentum to the bullish outlook for Bitcoin. As major players continue to accumulate positions, Bitcoin's trading volume has exceeded $41.8 billion, indicating that market activity remains robust.

Short-term volatility remains, but the traditional bullish effect in October is worth looking forward to.

However, analysts also point out that historical data shows there is still the possibility of short-term volatility in the market after a rate cut decision. In the 22 rate cuts studied, the stock market fell in the month following 11 of the cuts. This data reminds us that although the long-term trend is bullish, short-term fluctuations may still test investors' sentiment.

It is worth looking forward to that historically, October is the strongest month for Bitcoin, with an average return of 22.9%. This seasonal "October pump" effect typically stems from year-end liquidity inflows and reduced selling pressure.

Analyst Matt Mena from 21Shares pointed out that the Fed's dot plot signals indicate that they are open to accelerating the pace of easing if economic conditions require it. He believes this creates an "asymmetric bullish pattern" for Bitcoin before the end of the year.

Conclusion

The Fed's decision to cut interest rates has brought positive macro catalysts to the Bitcoin market, which is compounded by strong institutional demand and seasonal bullish patterns. Although the market may still face volatility in the short term, and the FOMC statement has limited direct impact on prices, Bitcoin's price movements are more driven by market sentiment, cyclical liquidity patterns, and broader adoption trends. Overall, with the shift in monetary policy towards easing, continued entry of whales, and the traditional "October rise" expectations, Bitcoin is ushering in a hopeful year-end market.