In the past decade, the peaks and troughs of Bitcoin have reflected the interest rate policies of the Federal Reserve (FED).
- At the top, it often occurs when interest rate hike expectations are strongest.
- At the bottom, it is accompanied by the expected shift towards interest rate cuts.
Now, the market stands at a fork in the road with three paths:
- Interest Rate Hike Resumed → Second Bottom?
- Interest rate cut in the second half of the year → A surge after fluctuations?
- Mid-year interest rate cut → Bull market acceleration?
These paths determine how Bitcoin’s next segment should proceed.
This article will break down the BTC trend in three scenarios, allowing you to understand the macro + price game logic at once.
1. A review of the Federal Reserve (FED) 10-year interest rate policy, how do the “top” and “bottom” of Bitcoin correspond?
Over the past decade (around 2015-2025), the Federal Reserve (FED) has experienced a complete cycle of interest rate hikes, cuts, subsequent hikes, and pauses. Reviewing this history, we find an intriguing correlation between the turning points in Bitcoin prices and the policy nodes of the Federal Reserve (FED), especially the phenomenon of market expectations “pre-reacting”.
Let’s start with the conclusion:
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Bitcoin bull tops often lead the initiation or acceleration of interest rate hikes, with the market trading on tightening expectations in advance.
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Bitcoin bear bottoms usually occur in the later stages of interest rate hikes, during pauses in interest rate hikes, or before the start of a rate-cutting cycle. The market looks for a bottom when the most pessimistic or easing expectations arise.
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Quantitative easing (QE) or rapid interest rate cuts, known as “big water release”, are important catalysts for a bull market.
The following is a comparison table of the main interest rate policies of the Federal Reserve (FED) and the key trends of Bitcoin over the past ten years:
This table clearly shows the key turning points in Bitcoin prices and the “time lag” of The Federal Reserve (FED) policy cycles. Whether during the bull market peaks of 2017 or 2021, they occurred just before the “hammer” of interest rate hikes truly fell or the strongest interest rate hikes. The bottoms of bear markets are often accompanied by an expectation of a shift towards interest rate cuts.
Currently, we are in a “pause on interest rate hikes” + “short-term interest rate cut” platform period, and the market is waiting for the next clear directional signal—whether another interest rate cut can occur, entering the quantitative easing “massive liquidity injection” phase.
2. Interest Rate Projection: Three Scenarios Based on Institutional Forecasts
As of now (April 2025), there is a clear divide in the market regarding the next move of The Federal Reserve (FED). We have synthesized the viewpoints from several mainstream research institutions and summarized three possible scenarios:
1. Worst Case: Facing interest rate risk in 2025-2026
- J.P. Morgan (3 March report): Although predicting a rate cut, it also clearly stated that if employment and inflation data turn out to be unexpectedly strong, the possibility of discussing a rate hike within the year cannot be ruled out.
- LSEG (London Stock Exchange Group, early April report): Emphasizes the rising “stagflation risk” and persistent inflation, believing that the reasons supporting the “extension of the policy pause” are very sufficient.
Tariff policies and geopolitical factors pose potential upside risks to inflation, which may force the Federal Reserve (FED) to maintain a tightening stance, potentially resulting in a high interest rate environment throughout the year, with market liquidity remaining under pressure.
2. Base Case: Rate cuts will begin in the second half of the year, with two occasions throughout the year
- J.P. Morgan (3 March report): Predicts that The Federal Reserve (FED) will remain patient until June, then cut interest rates 2 times, bringing the rate down to 3.75% - 4.00% by the end of Q3.
- EY (Ernst & Young, March report perspective): It is expected that there will be two interest rate cuts in 2025, in June and December, each by 25 basis points.
- The Federal Reserve (FED) March meeting: Most officials still expect 2 rate cuts in 2025, with the annual Intrerest Rate dropping to 3.75% to 4%.
These views suggest that despite inflation being sticky, the overall trend is downward, and the economy and job market will gradually cool down. The market oscillated in anticipation during the first half of the year, while the interest rate cut cycle will begin in the second half.
3. Best Case: Start interest rate cuts in the middle of the year, 3 times or more throughout the year
- Morningstar (March 28 report viewpoint): The first interest rate cut is expected in June, with a total of 3 cuts in 2025, 75 basis points (, bringing the year-end interest rate down to 3.50% - 3.75%.
- Plymarket: According to Polymarket data, the most popular bet is for a total of 3 interest rate cuts (75 basis points) throughout the year, accounting for about 20%. Next is 4 cuts (100 basis points) and 5 cuts (125 basis points), which account for 18% and 13.3% respectively, reflecting a growing market bet on an aggressive easing path. The scenario that was most favored at the beginning of the year, “only 2 interest rate cuts,” has now also fallen to around 13% support. Overall, the market has reached a basic consensus that there will be at least 2 interest rate cuts in 2025, but there is still significant disagreement on whether there will be a stronger easing cycle, with expectations yet to be anchored.
These views suggest that if inflation declines faster than expected, or if the economy shows significant weakness, the Federal Reserve (FED) may implement three or more interest rate cuts in 2025.
) III. Bitcoin Price Projection: How will the price of Bitcoin trend under three interest rate scenarios?
Based on the three evidence-based interest rate scenarios mentioned above, we forecast the price trend of Bitcoin in the near future:
1. Worst Case (Facing Interest Rate Hike Risks in 2025-2026): The top has been reached or a second bottom is being tested, with bear market thinking prevailing
Market Trend Analysis: If the market confirms the risk of interest rate hikes, Bitcoin will likely face selling pressure in Q2 2025 and thereafter. The previous high may be the final peak of this cycle. Market sentiment will turn pessimistic, and a deep correction may occur, testing the key support below, and the possibility of a second bottom cannot be ruled out.
Peak judgment: It can be basically confirmed that the peak has passed, and in 2025 it will most likely be in a downward continuation or bottom oscillation.
2. Base Case (Interest rate cuts in the second half of the year, 2 times throughout the year): Patient oscillation, hitting the peak area at the end of the year
Market Trend Analysis: During the Q2-Q3 period, while waiting for clear signals of interest rate cuts, Bitcoin is likely to maintain a high-level wide-range fluctuation. Market sentiment will fluctuate with the data. Once the expectations for interest rate cuts are confirmed and the first rate cut is implemented at the end of Q3/Q4, it may trigger the final sprint of the bull market, but this is more likely to be driven by sentiment and liquidity expectations, a “last train” market.
Cycle peak determination: It may occur in Q4 2025 or early 2026, which aligns with some predictions of the halving cycle model. It is important to note that when the interest rate cut news materializes, the market may have already fully priced it in, or even experience a “sell the fact” correction. The real price top may occur when the expectations for interest rate cuts are at their highest but not yet fully realized.
3. Best Case (Interest rate cuts start mid-year, 3 times or more throughout the year): Bull market accelerates, peaks earlier and may be higher
Market Outlook: If an unexpected economic downturn forces the Federal Reserve to cut interest rates early, it will greatly boost market risk appetite. Bitcoin is expected to quickly break free from its fluctuations and launch a powerful offensive, driving the entire cryptocurrency market into a frenzy.
Cycle peak judgment: It may be advanced to early Q3 or Q4 of 2025. An earlier arrival of liquidity easing could push prices to higher levels, but the duration of the entire cycle will be correspondingly shortened.
Four, Summary
The Federal Reserve’s interest rate decision remains an anchor for global asset pricing, especially for a highly volatile asset like Bitcoin. At present, although the market is repeatedly ridiculing the numbness, according to the predictions of major mainstream institutions, it is still at a critical juncture of expected swing. While lowering your position, you may be able to retain a glimmer of hope.
