Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin faces significant resistance around $116,000, which analysts at Bitfinex warn will persist until the cryptocurrency can “decisively reclaim” that level amidst fading momentum. This comes as the market awaits the U.S. Federal Reserve’s interest rate decision on Wednesday, with crypto analysts divided on how Bitcoin’s price will react to a potential rate cut.
Bitcoin’s Resistance and Fading Momentum
According to a report released by Bitfinex on Tuesday, Bitcoin is currently trading at the upper edge of its range near $116,000, a level that has established itself as strong resistance. The report highlighted that Bitcoin’s momentum has diminished since it reached an all-time high of $124,100 on August 14.
This decline has pulled the price below the cost basis for recent buyers who entered the market in the $108,000 to $116,000 range. At the time of publication, Bitcoin was trading at $116,370, showing a 4.34% increase over the past seven days.
Fed Rate Decision Looms
The slight rebound in Bitcoin’s price over the past week coincides with the anticipation of the U.S. Federal Reserve’s interest rate announcement on Wednesday. Market participants are largely expecting a 25 basis point rate cut, with the CME FedWatch Tool assigning a 96.1% probability to this outcome.
Divided Analyst Opinions
The potential rate cut has fueled a debate among crypto analysts regarding its impact on Bitcoin’s price. Tom Lee, co-founder of Fundstrat, suggested that the Fed’s first rate reduction this year could serve as a catalyst for Bitcoin and Ether to make “a monster move in the next three months.”
However, others remain more cautious. Crypto analyst Ted, while confident in a rate cut, outlined in an X post on Tuesday that Bitcoin could initially drop to $104,000 before a reversal, or even fall to $92,000 before eventually rebounding to a new all-time high.
Historically, a reduction in interest rates is often seen as a bullish signal for risk-on assets, as it makes traditional investments like bonds less attractive. Nevertheless, analysts frequently caution that markets may have already priced in such events, potentially leading to price declines even after seemingly bullish announcements.
Broader Market Sentiment and Catalysts
Overall crypto market sentiment appears divided, with the Crypto Fear & Greed Index registering a “Neutral” score of 53 on Wednesday. Beyond the Fed decision, market participants are also looking towards October 1, which marks the start of the fourth quarter of 2025.
Historically, the fourth quarter has been Bitcoin’s best-performing period, boasting an average return of 85.42% since 2013, according to CoinGlass data.
Long-Term Holder Confidence
Despite the recent price volatility, Bitfinex analysts indicate that long-term holder confidence remains robust. They noted that the sell-off that pushed Bitcoin down to $107,400 on September 1 was primarily driven by investors who had purchased within the last six months.
The analysts explained that this dynamic suggests investors who accumulated during the February to May correction capitalized on the recent bounce as an opportunity for profitable exits, thereby creating “meaningful headwinds for further upside momentum.”
Bitcoin currently navigates a critical resistance level at $116,000, with its trajectory heavily influenced by the impending Fed rate decision and a split among expert opinions. While some foresee a significant upward move, others anticipate potential short-term pullbacks, all against a backdrop of neutral market sentiment and strong long-term holder conviction.
