Bitcoin Faces Resistance at $116K: Will Fed Rate Cut Help?
Bitcoin's $116,000 Hurdle: Momentum Needed
Bitcoin (BTC) is currently trading near the upper edge of its range, facing significant resistance around $116,000. According to Bitfinex analysts, this resistance level is likely to remain in place until the cryptocurrency experiences renewed upward momentum.
A recent report from Bitfinex highlights that Bitcoin's momentum has waned since reaching its all-time high of $124,100 on August 14. The price has subsequently fallen below the cost basis for recent buyers who entered the market between $108,000 and $116,000.
As of the time of publication, Bitcoin is trading at approximately $116,370, according to CoinMarketCap. Despite this, there is cautious optimism surrounding two potential catalysts that could reignite Bitcoin's upward trajectory.
Potential Catalysts: Fed Rate Cut and Q4 Seasonality
One potential catalyst is the anticipated decision from the U.S. Federal Reserve regarding interest rates. Market participants currently assign a high probability (96.1%, according to the CME FedWatch Tool) to a 25 basis point rate cut.
Analysts Divided on Fed Impact
The potential impact of a Fed rate cut on Bitcoin's price remains a subject of debate. Fundstrat co-founder Tom Lee believes that the Fed reducing rates could trigger a significant rally for both Bitcoin and Ether (ETH).
However, other analysts are more cautious. Crypto analyst Ted suggested in an X post that Bitcoin could initially decline to $104,000 or even $92,000 before staging a potential rebound to new all-time highs.
Historically, interest rate cuts have been favorable for risk-on assets like cryptocurrencies, as they reduce the attractiveness of traditional investments such as bonds. However, market anticipation of such events can sometimes lead to price declines after the actual announcement.
Q4 as a Potential Bullish Factor
The start of the fourth quarter of 2025 on October 1 presents another potential catalyst. Historically, Q4 has been Bitcoin's strongest performing quarter, boasting an average return of 85.42% since 2013, according to CoinGlass.
Bitfinex analysts also noted that long-term holder confidence remains strong. The recent sell-off, which saw Bitcoin briefly dip to $107,400 on September 1, was primarily driven by investors who had acquired Bitcoin within the past six months.
"This dynamic suggests that investors who accumulated during the February – May correction used the recent bounce as an opportunity to exit profitably, creating meaningful headwinds for further upside momentum," the analysts concluded.