Bitcoin Soars to $116K After Fed Rate-Cut Hints. What’s Next?

Bitcoin (BTC) surged above $116,000 on August 22, 2025, after U.S. Federal Reserve Chair Jerome Powell suggested that interest rate cuts could arrive as early as September. His remarks at the Jackson Hole Economic Symposium sparked a wave of optimism across global markets and crypto responded instantly.

Price Data, Aug 22|CoinMarketCap

Powell’s dovish turn ignites Bitcoin rally

In his speech, Powell noted that inflation is easing and the U.S. labor market appears “balanced,” giving the Fed room to consider a monetary policy shift. Markets quickly interpreted this as a near-term pivot from restrictive to accommodative policy.

According to CME FedWatch, traders now price in nearly 90% odds of a rate cut at the next Fed meeting, up sharply from about 75% just a week ago. This drove a rally in risk assets, with Bitcoin jumping from $112K to $116K in less than an hour.

Ethereum (ETH) climbed nearly 9%, Solana (SOL) and XRP also gained ground, while the total crypto market cap approached $4 trillion, marking one of the strongest daily moves since June.

Institutional analysts raise long-term price targets

Research firm Bernstein maintains its late-2025 BTC price target at $140K–$150K, with a longer-term projection that Bitcoin could test $200K within 12 months if rate cuts materialize and institutional inflows accelerate.

“Bitcoin remains the cleanest macro hedge in a world where liquidity conditions are turning,” the firm wrote in a note to clients, highlighting increased demand from ETFs, sovereign wealth funds, and U.S. retirement products.

Key support levels now in focus

Despite the surge, Bitcoin remains below its $124K peak from earlier this month. Traders are watching the $115K–$116K support zone closely. If BTC closes the week above this range, many analysts believe a fresh rally toward $120K–$122K could unfold quickly.

Conversely, a failure to hold this level might invite profit-taking, with downside support at $110K and $106K.

Macro data will guide next market move

The coming weeks could be decisive. Key U.S. inflation and jobs data will guide the Fed’s next steps. Any upside surprises in inflation could dampen expectations for rapid easing, potentially capping Bitcoin’s upside.

On the flip side, if economic indicators continue to soften, liquidity injections from rate cuts could push BTC toward new all-time highs before year-end.

Bottom line

Powell’s softer tone at Jackson Hole has reignited bullish sentiment, sending Bitcoin back over $116,000 and boosting the entire crypto complex. But this rally will need confirmation from both macroeconomic data and institutional momentum to prove sustainable.

For now, Bitcoin traders should watch $115K as the key pivot level, while keeping an eye on September’s Fed meeting which may shape the next phase of this bull market.

Disclaimer

This article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments are highly volatile and involve significant risk. Always conduct your own research and consult a licensed financial advisor before making investment decisions.