Bitcoin rallies 4% to $116K as rate cut hopes boost crypto momentum

Bitcoin rose nearly 4.42% over the past week to trade at $116,031 on Monday, gaining momentum despite macroeconomic headwinds. Analysts say the rally is driven by expectations of U.S. rate cuts and technical factors, including the filling of a CME futures gap.

“Trading around $115,500–$116,000, Bitcoin has pushed higher over the past week despite macroeconomic headwinds. Key drivers include anticipation of U.S. rate cuts and technical patterns, such as filling a futures gap (CME gap) that traders are watching closely. Resistance lies near $117,500, while support remains in the $115,000 area,” according to CoinSwitch Markets Desk.

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Edul Patel, CEO of Mudrex, noted: “Bitcoin is holding firm above $115,400, regaining bullish momentum on supportive macroeconomic cues. Investors are confident of a 25bps Fed rate cut, though Chair Powell’s commentary will be crucial. Currently, $117,100 is a critical resistance, with strong support around $113,500.”

“Currently, the $117,100 level remains a critical resistance, with strong support around $113,500. Meanwhile, Solana remains in the spotlight after confirming a breakout at $242, with momentum pointing toward $261 if buying interest sustains,” Patel added.

At 10:07 AM IST, Bitcoin was trading at $116,001, up 0.19% over the past 24 hours and nearly 4.34% over the past week. Ethereum, meanwhile, was at $4,648, down by 0.33% in the past 24 hours and 7.96% over the last seven days.

According to CoinMarketCap, the overall cryptocurrency market capitalisation stood at around $4.06 trillion on Monday.

“Ethereum is consolidating around $4,600–$4,700, having rallied from early-September lows. Resistance ahead at ~$4,760 and possibly toward $5,000 if bullish momentum holds. Key support is between ~$4,550–$4,650. Also, institutional flows via ETH ETFs and shrinking exchange reserves are tightening sell-side pressure, boosting sentiment,” according to CoinSwitch Markets Desk.

“The Fed is expected to cut rates on Sept 17, which is driving speculative demand. But there’s a “catch”, longer-term Treasury yields might stay elevated due to inflation, undermining some of the potential tailwinds for BTC, the CoinSwitch Markets Desk further expects.

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Here's what other analysts say

Parth Srivastava, Head of Quant at 9Point Capital’s Research Team

Bitcoin has decisively broken out of its downward channel, backed by strong inflows and on-chain data showing more than 70% of long-term holders unmoved. With supply tightly held and momentum building, the setup for a parabolic rally is in place. We expect BTC to challenge the $160,000–$180,000 range by year-end.

Sathvi Co-Founder & CEO, Unocoin

Bitcoin is trading around $115,500, consolidating ahead of tomorrow’s FOMC meeting. Markets expect the Fed to hold rates steady, with a dovish tilt possibly signalled through forward guidance. If the Fed confirms expectations of rate cuts in late 2025, Bitcoin may break above $120,000, targeting $125,000. However, a hawkish surprise — such as pushing rate cuts into 2026 — could trigger a drop toward $110,000 or even $105,000.

Investors are positioning cautiously, with volatility likely to spike post-announcement. Risk assets, including crypto, are highly sensitive to liquidity signals. A neutral-to-dovish tone could fuel another leg up for BTC, but if the Fed emphasises inflation concerns, a sell-off across risk markets is highly probable.