Bitcoin and Ethereum prices remain steady as traders brace for Fed rate cut

Bitcoin and Ethereum prices were little changed on Tuesday as traders set up for the Federal Reserve’s rate decision on Wednesday, a closely watched call that analysts say could reset risk appetite into year-end.

Matt Mena, crypto research strategist at 21Shares, called the meeting less about whether the Fed cuts and more about by how much.

The base case is a quarter-point cut. CME FedWatch shows traders overwhelmingly positioned for a 25 basis-point move, while prediction venues like Polymarket still assign a slight chance to 50 bps. Analysts predict the latter could be the spark for a renewed leg higher in crypto if realized.

Mena noted up to $7.5 trillion in money market funds that are poised to see yields fall as policy eases. It’s “a powerful incentive” for capital to rotate back toward equities and alternatives such as crypto, he added.

“A 25 bps cut is already in the price, but a surprise 50 bps would likely act as the spark for a renewed leg higher,” Mena said, adding that a more-dovish dot plot could force a repricing across the curve.

Ahead of the Federal Open Market Committee, bitcoin hovered around the $115,000–$116,000 level on Tuesday as traders braced for the Fed’s policy outcome. According to The Block’s price page, ether also logged horizontal price movement as the crypto market held its breath before the meeting.

‘The rally remains fragile ahead of FOMC,” said Timothy Misir, head of research at BRN, citing a “knife-edge” setup in leverage and lighter hedging that could amplify the post-Fed move.

Still, flows into crypto ETFs have perked up in recent days. The Block’s data dashboards show U.S. spot bitcoin and ether products stacking multiple consecutive sessions of net inflows heading into the event. Misir said it signals renewed institutional appetite after a choppy August.

U.S. spot BTC ETFs capped six straight days of inflows with about $260 million on Sept. 15, while $360 million in capital for spot ether products marked five consecutive days of positive flows for ETH.

Kyle Rodda, senior market analyst at Capital.com, said broader risk appetite has been buoyed by anticipation of easing, with tech leading U.S. equities to fresh records. Yet, he warned the near-term risk is a “measured, cautious and less dovish” Fed that pulls some future cuts out of the curve. This could pressure stocks and strengthen the dollar, briefly leaving cryptocurrencies in limbo.

Historically, September has been a challenging month for BTC, ETH, and other cryptocurrencies. At the same time, the upcoming quarter is usually a bullish period for BTC and risk assets. While recent tepid action has spurred speculation around an end of the rally, onchain options venue Derive.xyz framed September volatility as a “breather” rather than a top. Head of research Dr. Sean Dawson pointed to options boards tilting bullish into the December expiry, with BTC call open interest concentrated from $140,000 to $200,000 strikes and ETH skew implying rising odds of a $5,000–$6,000 year-end print.

However, these price levels are contingent on macro easing momentum and persistent ETF demand, Dawnson wrote.