Fed Is About to Cut Interest Rates: Can Bitcoin Exceed the 120,000 USD Mark?

Bitcoin is returning to a critical moment. The U.S. labor market is showing signs of weakness, with job growth lower than expected and a rising unemployment rate. This change has led the market to believe that the Federal Reserve will begin cutting down the whales as early as September, a move that could alter the liquidity landscape of risky assets. For Bitcoin, the intersection of weaker economic data and the potential for monetary easing occurs just as the chart shows signs of stabilization after weeks of decline. The current question is whether the upcoming interest rate cuts by the Fed will serve as a catalyst to push BTC prices into a new bullish phase or if macroeconomic uncertainties still weigh heavily on prices. Bitcoin Price Prediction: Labor Market Signals and Fed Policy Changes

The latest employment data from the United States paints a clear picture of a cooling labor market. Only 22,000 jobs were created in August, far below the expected 75,000, while the unemployment rate edged up to 4.3%. This is the weakest labor backdrop since 2020. The number of jobs has fallen below the unemployment level for the first time in years, indicating that employers are actively cutting down the whales.

For investors, the key point lies in the Fed's response. With the market predicting a 100% chance that the Fed will cut interest rates in September - and even the possibility of a 0.5% reduction - monetary conditions are set to loosen. Historically, the Fed cutting interest rates during non-recession periods tends to benefit risk assets, including cryptocurrencies. Lower yields and borrowing costs support liquidity, which tends to spill over into both stocks and Bitcoin. Current Technical Setup of Bitcoin

Looking at the daily BTC price chart, the price is consolidating above 111,000 after a month of adjustment from the mid-July high of nearly 120,000. The Bollinger Bands indicate that volatility is narrowing, with the upper band near 115,300 acting as resistance and the lower band around 107,600 serving as support. The recent candles show stability, with buying pressure protecting the lower band and preventing further breakdown. However, the 20-day moving average (blue line) is still trending downwards, signaling that the market has not fully transitioned to a bullish trend. The short-term structure is a battle between light recovery phases and broader consolidation. If Bitcoin can regain and hold above the 112,000–113,000 level, the next bullish test will be at the 115,000–116,000 range. A rejection here could trigger a retest of the 108,000 support zone. Below that, the chart will leave room for deeper tests towards 102,000–104,000. Macro Meets Crypto: Why This Context Is Important What makes this setup interesting is the timing. Bitcoin prices often surge during periods when the Fed shifts from tightening to easing. Increased liquidity boosts speculative sentiment, and cryptocurrencies typically benefit asymmetrically compared to stocks. However, the weakness of the labor market has not yet been accompanied by a fall in the level of recession. This means that investors are betting that growth can be maintained while interest rates are cut - an attractive point for risk assets. If inflation shows signs of cooling this week, the Fed may have more room to act more aggressively, further strengthening the bullish outlook for Bitcoin. Things to Watch in September The Fed meeting on September 17 – The decision on interest rates will be very important. A cut of 0.25% has been factored in, but a surprise cut of 0.5% could trigger a risky rally. Inflation data (CPI/PPI) – If inflation falls along with labor market weakness, the market may price in multiple cuts in the future. BTC price chart breakout – Closing above 113,000 points indicates that buyers are regaining momentum. Failure at this level leaves Bitcoin vulnerable to a retest below 108,000 points. Bitcoin Price Prediction: Where Will BTC Go Next? With the convergence of weak labor data, an impending interest rate cut, and the technical consolidation of $Bitcoin, the market is leaning towards a bullish breakout. If the buyers surpass the 115,000 mark, a momentum towards the 120,000 mark in October is entirely possible. However, failing to hold above the 111,000 mark in the upcoming sessions risks pushing the price down to the support zone of 104,000–106,000 before any significant recovery occurs. The macro context supports higher prices in Q4, but the volatility surrounding the Fed's decision and inflation reports will make traders anxious. Currently, $BTC is at a crossroads - it could break out if the Fed takes action, but it remains fragile if economic data deteriorates faster than expected.