Bitcoin is trading steadily around the $116,000 mark as the cryptocurrency market awaits the Federal Reserve’s interest rate decision expected later today. The world’s largest cryptocurrency hit a near one-month high on Tuesday, recovering from losses experienced in late August.
As of the latest data, Bitcoin is priced at $116,370, showing a 0.5% increase in recent trading sessions. The cryptocurrency has gained 4.34% over the past seven days, according to CoinMarketCap.
Market participants are widely expecting the Fed to cut interest rates by at least 25 basis points at the conclusion of its meeting today. Some traders are even anticipating a more substantial 50 basis point reduction.
This potential rate cut comes primarily in response to signs of cooling in the U.S. labor market, which has been a key consideration for the Federal Reserve’s monetary policy decisions.
However, recent indications of persistent inflation in the United States have created some uncertainty about the Fed’s future outlook. Chair Jerome Powell has repeatedly expressed caution regarding the inflationary effects of higher U.S. trade tariffs.
Lower U.S. interest rates typically benefit cryptocurrencies as they increase liquidity in financial markets. This available capital can then flow into speculative assets like Bitcoin.
The cryptocurrency’s 2021 bull run was largely driven by ultra-low U.S. interest rates following the COVID-19 pandemic.
On-chain data from CryptoQuant reveals that Bitcoin reserves on centralized exchanges have fallen to their lowest level since January 2023.
This trend suggests that an increasing amount of Bitcoin is being moved from active trading platforms into private storage. Analysts interpret this as a sign of reduced selling pressure on the cryptocurrency.
At the same time, stablecoin balances on exchanges are rising, indicating a build-up of active liquidity. This “dry powder” could signal that investors are positioning themselves for increased buying activity in the coming days.
Despite these positive indicators, broader cryptocurrency prices remained in a tight range on Wednesday. Ethereum, the second-largest cryptocurrency, fell 0.8% to $4,492.59, while XRP rose 0.4% to $3.0152.
Bitfinex analysts noted in a Tuesday report that Bitcoin “now trades at the upper edge of the range near $116,000, which remains resistance until decisively reclaimed.”
The report highlighted that Bitcoin’s momentum has faded since reaching its all-time high of $124,100 on August 14. Its price has subsequently fallen below the cost basis of recent buyers who entered the market in the $108,000 to $116,000 range.
Market participants remain divided over how Bitcoin will react to the Fed’s decision. Fundstrat co-founder Tom Lee cited the rate cut as a potential catalyst for Bitcoin making “a monster move in the next three months.”
Others maintain a more cautious outlook. Some analysts predict Bitcoin could drop to $104,000 or even $92,000 before potentially rebounding to new all-time highs.
The crypto market’s overall sentiment appears balanced, with the Crypto Fear & Greed Index posting a “Neutral” score of 53 on Wednesday.
Long-term holder confidence remains strong despite recent market fluctuations. Bitfinex analysts observed that the recent sell-off, which saw Bitcoin drop to $107,400 on September 1, was largely driven by investors who purchased within the past six months.
Market participants are also looking ahead to October 1, which marks the beginning of the fourth quarter of 2025. Historically, Q4 has been Bitcoin’s strongest performing quarter, with an average return of 85.42% since 2013, according to data from CoinGlass.
Bitcoin’s recent price action comes after recovering from its all-time high of $124,100 reached in mid-August 2025.
The post Bitcoin (BTC) Price: Holds at $116K as Federal Reserve Rate Decision Approaches appeared first on Blockonomi.
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