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Bitcoin rallied above $117,000 after the Federal Reserve’s first 2025 rate cut boosted liquidity outlook and renewed risk appetite across financial markets.
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Rising spot and derivatives volumes suggest stronger market participation, with technical indicators pointing to potential volatility ahead.
Bitcoin surged back above $117,000 on renewed optimism in global markets after the U.S. Federal Reserve delivered its first interest rate cut of 2025. The move, aimed at easing financial conditions amid rising unemployment, boosted risk assets across the board, with cryptocurrencies leading the rally.
At press time, Bitcoin was trading at $117,476, marking a 0.9% gain over the past 24 hours and a 3% increase on the week. Trading activity picked up significantly, with 24-hour spot volume jumping 49.6% to $60.9 billion. The renewed participation comes after a quieter September and signals that traders are once again positioning for larger moves.
Derivatives Point to Rising Volatility
The derivatives market echoed the surge in spot trading. Bitcoin futures volume leapt 65.9% to $119.8 billion, while open interest climbed to $85.7 billion, according to Coinglass. The simultaneous rise in volume and open interest suggests that traders are taking on new leveraged positions rather than closing existing ones, a setup that often precedes sharp price swings.
Growing open interest combined with volume is a signal of heightened activity and conviction,
one market analyst noted, adding that volatility could pick up significantly in the days ahead.
Fed’s Rate Cut Spurs Risk Appetite
The Federal Open Market Committee (FOMC) voted 11-1 on September 17 to reduce the federal funds rate by 25 basis points to 4.00%–4.25%, its first cut since December 2024. The decision was driven by rising unemployment, which climbed to 4.3% in August, the highest level since 2021.
Fed Chair Jerome Powell described the move as “risk management,” suggesting that employment concerns now outweigh inflation, which remains above target with headline CPI at 2.9% and core CPI at 3.1%. The policy shift weakened the U.S. dollar, lifted equities, and accelerated crypto inflows.
Andrew Forson, President of DeFi Technologies, told crypto.news that lower rates could redirect capital flows:
There will be continued inflows into innovation and tech-related businesses since the returns they stand to offer will be considerably higher than less risky government-backed fixed income instruments.
He also noted that staking-focused digital assets may grow increasingly attractive, combining yield with potential capital appreciation.
Bitcoin Technical Outlook
Technically, Bitcoin is trading in the upper half of its Bollinger Bands, with immediate resistance near $118,700 and support around $112,900. The Relative Strength Index (RSI) is at 62, reflecting neutral-to-bullish momentum but edging toward overbought territory.
The 10-day and 20-day moving averages remain below Bitcoin’s current price, confirming a short-term bullish bias. The MACD is flashing a buy signal, though overbought conditions on the Stochastic RSI and Williams %R suggest caution.
In a bullish breakout, a move above $118,700 could pave the way for a retest of the mid-August high of $124,128. On the downside, failure to hold $115,000 could bring the 100-day SMA near $111,600 into focus as the next key support.
With monetary policy now tilting dovish and investor sentiment improving, Bitcoin’s momentum could set the tone for the broader crypto market heading into the fourth quarter.
