Just hours now (depending on when you read this) until the US Federal Reserve is expected to deliver its long-awaited interest rate cut – the first of 2025, but possibly not the last. It’s unclear whether it will be a 25-basis-point cut or a 50-basis-point cut, but economists overwhelmingly agree that a cut is due.
However, David Kelly, chief global strategist at J.P. Morgan Asset Management, has issued a warning about the potential impacts on markets. In a note, Kelly said that if markets perceive the cuts to be driven by political pressure, it could spell trouble for the stock and bond markets, as well as the US dollar.
According to Bloomberg, Kelly urged investors to be cautious despite Wall Street’s optimism around expected rate cuts, warning that markets look frothy and diversification is prudent.
To the extent that the Fed’s decision this week is seen as a capitulation to political pressure, a new layer of risk is being added to US financial markets and the dollar.
David Kelly, J.P. Morgan Asset Management A statement issued on Crypto Twitter by 10x Research fits neatly into this narrative because it frames the Fed’s rate decision not as a straightforward bullish or bearish catalyst, but as a source of layered risk and shifting market psychology.
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The analysts said that many are frustrated with Bitcoin’s performance – despite solid 24% gains so far in 2025 – with pundits hoping the rate cuts will push BTC past US$120k (AU$180k).
This week, all eyes are on the Fed. Some argue a rate cut will be the spark that finally propels Bitcoin above $120,000. Others warn it could be a classic ‘sell the news’ moment. The reality, as always, is more complex.
10x Research According to 10x Research, crypto moves in “bursts, often tied to a single catalyst”, and therefore traders risk being caught off guard if they focus only on the headline policy move.
Inflows, positioning, seasonality, and even overlooked signals such as credit spreads can all amplify or mute the impact of a Fed cut. As 10x noted, history shows that an initial rally can fade quickly, only for a stronger breakout to emerge weeks later once liquidity dynamics and market structure align.
As all eyes turn to the Fed’s next move, Bitcoin is slowly tracking upwards. At the time of writing, it is trading at US$116,390 (AU$174,313), up by 1.5% over the past 24 hours and 4.4% over the past week.
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The post Bitcoin, the Fed, and the $120K Breakout Debate: Analysts Say Rate Cut May Be Priced In appeared first on Crypto News Australia.
Also read: Fundstrat CIO Tom Lee Predicts ‘Monster’ Gains For Bitcoin And Ethereum On Fed Rate Cut
