The Fed's interest rate cut triggers the crypto market: Bitcoin and SOL lead the rise, alts may welcome a new round of frenzy.

After Fed Chairman Powell announced a 25 basis point rate cut on September 17, the Crypto Assets market experienced a strong Rebound. Bitcoin (BTC) and a number of alts surged significantly, with the total market liquidation amount skyrocketing to $415 million, of which short positions accounted for $232 million. Historical data shows that within a year after a Fed rate cut, the S&P 500 index averages a 15% rise. Considering the strong correlation between Bitcoin and this index, analysts are closely following its subsequent trends.

Fed cuts interest rates, BTC, SOL, DOGE lead the market rebound

At the FOMC (Federal Open Market Committee) meeting held yesterday (September 17), Fed Chairman Jerome Powell announced the highly anticipated 25 basis point rate cut, which is also the first rate cut of 2025. Investors reacted positively to this, and the entire crypto market responded with a pump. Top digital assets led by Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) rose between 3% and 5%.

Bitcoin's daily trading volume surged by 41%, exceeding $67 billion, highlighting strong bullish sentiment among traders. Under the expectation of a new round of liquidity injection brought on by interest rate cuts, altcoins exhibited greater strength. Ripple's XRP price rose by 3% today, while other major coins like SOL, ADA, and DOGE also saw significant gains.

On the other hand, the U.S. SEC has allowed proposed rule changes regarding general listing standards for crypto ETFs, which could open a new wave of rapid approvals for crypto assets such as SOL, ADA, and DOGE. In the past 24 hours, all three of these alts have risen by more than 5%.

According to data from blockchain analysis company Glassnode, the open interest (OI) of Ethereum (ETH) and Ripple (XRP) continues to rise. This indicates a recovery in market leverage activity and strong demand from investors for directional exposure to these alts.

Can Bitcoin catch up with the rise of the S&P 500?

Despite the S&P 500 index continuing to climb to a historic high of over 6600 points, Bitcoin's recent rise has stalled, with prices hovering between 112,000 and 115,000 USD. A market researcher from The Kobeisse Letter pointed out: "Rate cuts begin when the (S&P 500) hits a historic high. When the Fed cuts rates within 2% of the historic high, the S&P 500 index averages a 14% rise in the following 12 months."

Currently, the price of Bitcoin is rising by 1% amidst a market-wide increase, reaching 117,531 dollars. If the daily closing price can stay above 117,200 dollars, it is expected to further rise to 120,000 dollars. Nevertheless, as BTC volatility decreases, investors remain in a wait-and-see mode. Crypto analyst Ali Martinez emphasized that according to the Pricing Bands model, 115,440 dollars is a key support level for Bitcoin. He pointed out that holding this level could lay the foundation for prices to rise towards 137,300 dollars, while breaking below this level could potentially lead to prices dropping to 93,600 dollars.

Conclusion

The Fed's decision to cut interest rates has injected strong momentum into the crypto market, which was already seeking new catalysts. This shift in macroeconomic policy, combined with potential favorable regulatory conditions, provides a window for Bitcoin and alts to accelerate their rise again. Although historical trends offer an optimistic outlook for Bitcoin's long-term performance, prices will still be constrained by key technical levels and market sentiment in the short term. Future market trends will depend on whether this liquidity-driven rebound can be sustained and whether Bitcoin can successfully break through its key resistance levels.