Bitcoin (BTC) experienced a significant price surge today, briefly climbing above $94,000 and reaching a seven-day high of $94,500, following a key decision by the Federal Reserve. The U.S. central bank announced a 25-basis-point reduction in its benchmark interest rate, setting the new target federal funds rate range to 3.50%–3.75%. This marks the third rate cut implemented by the Fed this year and the first since October, aligning policy closer to its long-term view of a neutral rate at 3%.

The Federal Reserve's decision was primarily aimed at supporting maximum employment and managing "somehow elevated" inflation, as stated by Fed Chair Jerome Powell. The central bank noted moderate economic expansion and slowing job gains as factors influencing the move. While the rate cut was largely anticipated by markets, with probabilities around 90% according to forecasts from major firms like Morgan Stanley, J.P. Morgan, and Bank of America, the vote was not unanimous. Most officials supported the reduction, but three dissented: one advocated for a larger 50-basis-point cut (Stephen Miran), and two preferred to maintain the rate unchanged (Austan Goolsbee and Jeffrey Schmid). Additionally, the Fed plans to inject liquidity into the U.S. financial system by purchasing $40 billion of Treasury bills per month.

Despite the immediate boost to Bitcoin's price, with BTC currently trading around $92,505 and showing a roughly 3% increase over the last 24 hours, broader financial markets presented mixed signals. The 10-year Treasury yield, for instance, has risen, indicating investor concerns that current easing policies might fuel future inflation. Fed forecasts, including the "dot plot" projections, remain modest for 2026 and 2027, anticipating small rate reductions, an unemployment rate of 4.4%, PCE inflation at 2.4%, and GDP growth at 2.3%. The previous rate cut in October saw Bitcoin price slip from $116,000 to $111,000, and Bitcoin has since plunged to lows of $80,000, showing varied responses to past Fed actions.

The current Bitcoin rally also reflects a broader trend of increased adoption and institutional interest in digital assets. PNC Bank, a major U.S. financial institution, has begun offering direct spot bitcoin trading to its eligible Private Bank clients, leveraging Coinbase's infrastructure. Concurrently, Bank of America recently advised its wealth management clients to allocate 1%–4% of their portfolios to digital assets. Coinbase Institutional further highlighted that speculative leverage has decreased significantly, from 10% to 4%–5% of total market capitalization, suggesting a potential reduction in extreme market volatility. Ark Invest CEO Cathie Wood has also posited that the market may have already experienced its four-year cycle lows.

From a technical analysis perspective, Bitcoin experienced a volatile week prior to the Fed's decision, dipping to $84,000 before being pushed up to $94,000, then slightly falling below $88,000, and ultimately closing the week at $90,429. Currently, key support levels for Bitcoin are identified at $87,200 and $84,000, with deeper support zones around $72,000–$68,000 and $57,700. Resistance levels are noted at $94,000, $101,000, $104,000, and a substantial zone between $107,000–$110,000, with momentum likely slowing above $96,000. While rate cuts traditionally lead to bullish momentum, the market's pre-emption of this particular cut means its impact might have been largely priced in already. Bitcoin remains approximately 25% below its all-time highs.