Fed Rate Cuts Could Propel Bitcoin to $200K—Here’s Why

Markets brace as Federal Reserve policy shift ignites crypto rally predictions.

Monetary Momentum

Lower interest rates traditionally weaken the dollar—pushing investors toward non-correlated assets like Bitcoin. The Fed's potential pivot creates perfect conditions for capital flight into digital stores of value.

Technical Breakout Territory

Historical patterns show Bitcoin outperforms during liquidity injections. With institutional adoption accelerating, this cycle could dwarf previous bull runs—Wall Street analysts suddenly becoming crypto experts overnight, naturally.

The $200K target isn't moon math—it's simple supply-demand economics meeting macroeconomic reality. Watch the Fed, then watch the charts.

TLDR

• Bitcoin dropped below $111,000 following the largest jobs revision cut in US history of 911,000 positions
• Spot Bitcoin ETFs have attracted over $1.1 billion in inflows over the past 10 days
• Federal Reserve rate cut probability stands at 88% for September 17 meeting
• Tom Lee predicts Bitcoin could reach $200,000 by end of 2025 with favorable Fed policies
• Technical analysis shows Bitcoin rebounding from wedge pattern with $129,000 upside target

Bitcoin faced downward pressure after dropping below $111,000 following shocking US employment data. The Bureau of Labor Statistics cut 911,000 jobs from payroll data in the steepest revision in history.

The cryptocurrency market mirrored declines in US stock markets as recession fears grew. The BLS removed 880,000 jobs from the private sector and 31,000 from government positions.

Unemployment rose to 4.3% while August job additions totaled just 22,000 versus 75,000 expected. Core Personal Consumption Expenditures inflation held at 2.9%.

Despite the weak data, investor appetite for Bitcoin remains strong. Spot Bitcoin ETFs recorded more than $1.1 billion in inflows over 10 days. A single Monday saw $368 million in inflows according to SoSoValue data.

Fundstrat’s Tom Lee maintains his bullish outlook. He told CNBC that bitcoin could “easily” reach $200,000 if the Federal Reserve implements favorable monetary policies.

Lee’s prediction reflects historical patterns where Bitcoin rallied during easing cycles. His forecast extends to the end of 2025.

Tom Lee said today on CNBC he thinks Bitcoin $BTC could easily hit

$200,000 by the end of 2025

pic.twitter.com/5LsyU6TfmO

— Tom Lee Tracker (@TomLeeTracker) September 8, 2025

Derive’s Sean Dawson offers a more cautious view. He assigns only a 23% probability that Bitcoin will exceed $140,000 by December. Dawson warns of a 20% chance BTC could fall below $100,000 if sentiment turns negative.

Federal Reserve Decision Looms

The Federal Reserve will announce its interest rate decision on September 17. CME FedWatch data shows an 92% probability of a 0.25% rate cut.

Weaker jobs data has sparked speculation about a surprise half-point cut. Prediction markets suggest nearly a 20% chance of this outcome.

Bond traders are betting on rate cuts with odds climbing toward 92%. Two more rate cuts may follow by 2025’s end according to CME data.

Historical precedent supports Bitcoin bulls. During the 1990-1991 recession, the Fed cut rates from 8.25% to 3% despite CORE PCE around 4%. Stocks initially fell 20% but rebounded 30% the following year.

Technical Outlook Remains Positive

Bitcoin has rebounded from a rising wedge pattern’s lower trendline. This suggests bulls are regaining control with an upside target NEAR $129,000.

The cryptocurrency trades above its 20-week exponential moving average at $108,500. This reinforces the bullish outlook and confirms strong support.

A decisive close above $115,000-$116,000 resistance could accelerate the rally. This WOULD mark the next leg of Bitcoin’s bull cycle toward new highs.

Bitcoin’s current price chart shows it fell from a year-to-date high of $124,200 in August. A double-top pattern formed at $123,027 with neckline support at $111,000.

Failure to hold current support could lead to a retest of $105,000. This represents the next key Fibonacci retracement level.

Gold has surged 40% year-to-date leading up to the jobs revision. Bitcoin has jumped 20.30% in 2025 under similar conditions and may mirror gold’s rally.