Bitcoin and Major Cryptos Rally After Fed Rate Cut, Eye New Highs

Bitcoin and other leading cryptocurrencies resumed their upward momentum following the Federal Reserve’s 25 basis point rate cut to 4% on Wednesday. Analysts had predicted a slow grind higher, and bitcoin quickly surged past $117,900, its highest level since mid-August. The move marks a continuation of recovery from early September lows near $107,200. Ethereum gained 2.7% but remains within a narrowing four-week trading range, while altcoins such as Solana, Dogecoin, BNB, and XRP jumped 3–4%.

Solana briefly topped $245, boosted by the CME Group’s announcement that it will launch SOL and XRP options on October 13, signaling growing institutional interest. According to Matt Mena, research strategist at 21Shares, the Fed’s dovish interest rate projections create an “asymmetric setup” for bitcoin, potentially pushing prices above $124,000 by October’s end. Ether could also test the $5,000 mark.

However, the dollar’s rebound poses a challenge. The U.S. Dollar Index (DXY) recovered to 97.30 after dipping to a July low, reflecting investor caution despite dovish Fed signals. Chair Jerome Powell emphasized that successive rate cuts are not guaranteed, citing ongoing inflation and balance sheet runoff. A stronger dollar could tighten financial conditions, limiting crypto’s upside.

Meanwhile, crypto traders are increasingly hedging against tail risk. Data from BloFin shows demand for short-term put spreads on bitcoin, a strategy designed to protect against sharp declines. With rate-sensitive assets like BTC, investors are preparing for volatility even as the broader outlook remains bullish.

Overall, easing monetary policy, rising institutional adoption, and bullish technical setups suggest bitcoin and major altcoins may be on track for fresh highs, though dollar strength and macro risks remain key hurdles.