Bitcoin (BTC) Price Prediction: Eyes $126K Breakout as Fed Rate Cut Jitters Fuel Crypto Rally

Bitcoin's charging toward a monumental $126,000 breakout—and Wall Street's suddenly paying attention.

Fed Fears Fuel the Fire

Traditional markets are sweating over potential rate cuts, but crypto's dancing to its own beat. While bankers fret over basis points, Bitcoin's bypassing conventional wisdom and building momentum for what could be its most explosive rally yet.

The $126K Target

That number isn't just random—it's the next major resistance level that traders are watching like hawks. Break through that ceiling, and we're looking at uncharted territory that'll make previous all-time highs look like warm-up acts.

Meanwhile, traditional finance keeps playing checkers while crypto plays 4D chess—another day, another reminder that while they're worrying about quarterly reports, we're building the future of money.

Despite short-term uncertainty, market participants are positioning for both potential pullbacks and a sustained upward move, with technical patterns and macroeconomic indicators pointing to a possible historic rally.

Bitcoin Price Today Holds Key Support Levels

After bouncing from the $111,000 zone, Bitcoin has found a firm footing around $115,877, testing resistance between $116,000 and $118,000. The daily chart shows the 0.618 Fibonacci retracement level at $115,429 acting as a critical support.

Bitcoin (BTC) was trading at around $115,877, up 0.85% in the last 24 hours at press time. Source: Bitcoin price via Brave New Coin

Additionally, the 20-day and 50-day EMAs at $113,645 and $113,478 provide further stability. Breaking above $116,000 could set the stage for a push toward $123,600, while failure to clear this resistance may lead to a short-term pullback.

Fed Rate Cut May Trigger Short-Term Sell-Off

The Federal Reserve is expected to cut rates due to 3.1% inflation and 4.3% unemployment, adding liquidity to the financial system. This move could cause bitcoin to dip temporarily to $104,000, or potentially toward $92,000 where a CME futures gap has yet to be filled.

Bitcoin may dip ahead of the Fed rate cut before rebounding, as analysts warn of short-term volatility. Source: @TedPillows via X

Historical patterns show that rate cuts often trigger brief sell-offs before recovery. Bitcoin’s volatility, which can spike 3–4 times higher than equities during policy changes, reinforces the risk of short-term price swings ahead of the Fed decision.

Technical Patterns Suggest Potential Breakout

Short-term charts show a cup and handle pattern forming on the 4-hour timeframe, with a U-shaped recovery from $105,000 to $116,900 followed by a small pullback. A breakout above $116,900 could send Bitcoin toward $126,700, following the pattern’s historical performance.

BTC cup & handle nears breakout—surge above $116.9K could target $126.7K! Source: @Bitcoinsensus via X

While such patterns have generally low failure rates in bull markets, frequent formations NEAR all-time highs may produce false breakouts. Traders should be cautious and wait for confirmation before entering large positions.

Immediate Support and Resistance Levels

Immediate support sits at $113,500, reinforced by the 20-day and 50-day EMAs. If this level breaks, Bitcoin could test $111,100 and the 200-day EMA at $105,349, reflecting the scenarios for potential short-term pullbacks.

Bitcoin’s next MOVE hinges on the Fed rate cut, with potential dips before a push toward a $126K breakout if support holds. Source: Morad762025 on TradingView

Key resistance levels include $116,000, $118,000, $120,000, and $123,600, which could determine whether Bitcoin continues its upward trend. Surpassing these points may pave the way for a $126,000 breakout in the medium term.

Looking Ahead: Bitcoin’s Next Move

Bitcoin’s near-term direction will depend heavily on the market’s reaction to the Fed rate cut. As long as BTC remains above $113,500, medium-term momentum is expected to stay constructive.

Traders should prepare for possible dips toward $104,000–$111,000 before a sustained rally. If resistance levels are overcome and support holds, a historic $126K breakout remains within reach.