Bitcoin is trading closer to $117,000 after the Fed rate cut for the first time since December. The central bank reduced the benchmark rate by 25 basis points to a 4.00% - 4.25% range, citing weaker job growth and slow economic conditions.
Recent revisions indicated 911,000 fewer jobs created in the last year than were previously reported. Inflation is at 2.9%, which is still above the 2% target. US President Donald Trump has also pressured the central bank by calling for deeper cuts to be imposed by the policymakers.
The Fed's new outlook suggests two more cuts before the end of the year. This dovish attitude implies increased liquidity in the global financial system, which is generally positive for digital assets. Gold is trading below $3,700, and Bitcoin price is consolidating around $117,200.
Fed Chair Jerome Powell stressed that decisions on monetary policy are data-dependent. His message of caution was sufficient to keep the US dollar from declining steeply, but the expectation of looser financial conditions is taking its toll on the currency.
The market is closely following the labor and inflation reports to gauge how quickly movement is likely to occur in the future. Traders also measure Powell's statements for subtle hints of direction. On CME's FedWatch tool, markets were already pricing in a 96% probability of this week's rate cut.
On the technical side, BTC/USD is consolidating within a rising wedge at around $117,200 in the two-hour time frame. Although this structure is a warning sign, the highs and lows remain constructive to the upside at $116,000. The 200-SMA (Sure Mount Adapter) at $113,800 is an added level of support.
Candlesticks reflect strong demand at dips, while RSI is 59, almost overbought. Buyer demand was confirmed at lower levels near the bullish engulfing pattern at $115,800. A breakout above $117,600 may lead to $118,500 and $119,350 with potential near-term testing of $120,000.
In the longer term, continued higher lows could push the rally to $130,000. Analysts still talk about a potential $500,000 BTC supercycle if global liquidity merges with the increase in institutional demand.
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