Bitcoin Price Swings Dependent on Federal Reserve Actions and Changes in Altcoins

Bitcoin’s value has seen significant swings lately as market participants pay close attention to the Federal Reserve’s monetary policy actions and evolving market dynamics. As of the latest update, BTC hovered near $115,000, having earlier dipped to a two-week low of $112,565, reflecting increased uncertainty in macroeconomic conditions. This recent turbulence came in the wake of the Fed’s rate reduction on September 17, which triggered a sharp sell-off as traders took profits on the anticipated policy move. Over the previous four hours, the market recorded $147 million in liquidations, mostly impacting long traders. Analysts noted that such patterns are consistent with the historic tendency for rate cuts to prompt short-term declines before markets recover.

From a technical perspective, Bitcoin’s price action showed a cup-and-handle pattern, with resistance near the $116,000 mark and key support around $113,500 and $105,300. A sustained break above $116,900 could have pointed to a potential rally toward $126,700, in line with the outlook provided by the pattern. Even so, experts cautioned that similar scenarios at record price points have previously resulted in false surges, especially when there is strong resistance. The relative strength index (RSI) indicated that the asset had not yet reached overbought conditions, suggesting further upside could be possible if momentum continues.

The market had already factored in the Fed’s 25 basis point rate cut, which contributed to the muted responses observed across both crypto and stock markets. While

bounced back to $115,000 soon after the announcement, the overall crypto market delivered mixed results, with total market capitalization dropping by 0.57% in the past day. Major altcoins including and TRX experienced losses, whereas assets like ETH and posted gains. This tepid reaction was largely because the anticipated rate cut had already been priced in, mirroring the response seen in traditional markets such as the Nasdaq, which declined 1% after the Fed’s announcement.

Market observers remain attentive to the Fed’s broader policy outlook, particularly regarding expectations for two more 0.25% rate reductions in the months ahead. The dot plot showed that 9 out of 19 committee members foresee cuts in October and December, while one member projected a steeper 0.5% decrease in September. This policy direction is expected to influence liquidity trends, with analysts noting that Bitcoin’s volatility often multiplies to three or four times that of stocks during rate adjustment cycles. With the central bank signaling a shift toward a more accommodative approach, the cryptocurrency market could see heightened volatility—especially if the Fed continues its easing strategy.

Meanwhile, the altcoin sector is beginning to show signs of a potential “altseason,” a period characterized by increased capital movement from Bitcoin to alternative cryptocurrencies. Bitcoin’s market dominance has declined from a high of 65% to about 58%, a trend that has historically preceded major altcoin rallies like those in 2017 and 2021. Analysts have observed a golden cross in the altcoin market cap, where the 50-day moving average has moved above the 200-day, a signal previously associated with substantial gains in past cycles. In addition, the $OTHERS.D index, which tracks all cryptocurrencies except Bitcoin and

, is now retesting a trendline from 2014—a technical indicator that has often led to extended rallies. These signals suggest the pace of capital flowing into altcoins may be increasing, potentially fueling broader market growth.

Looking ahead, the forthcoming Fed meeting and Chair Jerome Powell’s speech at Jackson Hole are expected to be significant short-term drivers for Bitcoin’s price action. Traders will be monitoring these events for hints that could affect the timing and scale of future rate cuts, which in turn will shape the overall risk appetite in the market. Should Bitcoin remain above $113,500, the bullish technical picture is preserved, paving the way for a possible climb toward $126,000. Conversely, a drop below this level might open the door to deeper corrections. As volatility remains a dominant theme, the interplay between macroeconomic policy and technical support levels will be crucial in determining Bitcoin’s near-term path.