Main Points :
- Tom Lee (BitMine / Fundstrat) predicts that if the U.S. Federal Reserve cuts interest rates, Bitcoin (BTC) and Ethereum (ETH) may make a “monster move” over the next three months.
- Market expectations are strong for a 25-basis-point cut in September 2025, lowering the federal funds rate to 4.00-4.25%, with further rate easing anticipated.
- Technical analysts see Ethereum potentially reaching $6,750 by October in a breakout scenario, though downside risk to ~$4,200–$4,300 is also present.
- For Bitcoin, levels of support and resistance are clustering around $115,000–$116,000, with upside targets possibly toward $140,000 if conditions align (ETF inflows + Fed easing).
- Caveats: the rate cut may already be priced in, and what Fed Chair Powell says post-decision will be critical; also, patterns like rising wedges and divergences suggest pullback risks.
Federal Reserve Moves & Liquidity Winds
Tom Lee, chairman of BitMine and co-founder of Fundstrat, has emphasized that digital assets such as Bitcoin and Ethereum are particularly sensitive to monetary policy and liquidity. In episodes like September 1998 and September 2024, when the Fed had paused then cut rates, large rallies followed.
Markets strongly expect a 25 bps cut in the upcoming FOMC meeting (mid-September 2025), bringing the policy rate to 4.00-4.25%. Some probability remains of a larger cut (50 bps), though this is considered less likely.
Lower rates generally mean cheaper borrowing, more money circulating, more risk appetite — all favorable to risk assets like BTC & ETH. Moreover, seasonality is cited: Q4 historically tends to be favorable for cryptocurrency markets when policy is easing or expected to ease.
Technical & Market Dynamics for BTC and ETH
Ethereum (ETH)
- ETH is holding above key support zones around $4,450–$4,500, defended by the 20-day exponential moving average (EMA).
- A bull pennant appears to be forming — a continuation pattern. If ETH breaks decisively above its upper trendline, a move toward $6,750 by October is projected. That’s ~45% upside from current levels.
- If ETH loses support (20-day EMA, lower trendline, 50-day EMA), downside risk is toward $4,200–$4,350. But many analysts view such dips as buying opportunities.
Bitcoin (BTC)
- BTC has recently been trading in a consolidation range around $115,000–$116,000, with support near $114,000.
- Options markets signal optimism: for example, BTC calls expiring in December are clustering in strikes between $140,000-$200,000, indicating that traders are positioning for strong year-end upside.
- Another bullish scenario pivots on ETF inflows: large inflows to Bitcoin spot ETFs are reinforcing the demand side. If that merges with dovish Fed policy, it could catalyze a breakout.
Risks and What Could Go Wrong
- The rate cut seems already deeply priced in by many market participants. Thus, the announcement itself might lead to a “sell the news” reaction, unless accompanied by strongly dovish guidance.
- Technical warning signs: BTC showing possible rising wedge patterns, MACD / RSI divergences, which historically may precede pullbacks.
- Market fragility: light volumes, high leverage, light hedging — all of which could amplify volatility post-rate cut. Also, external macro risks (inflation sticking, global supply chain issues, geopolitical risk) may constrain upside.
Recent Data & Supporting Indicators
- Over the past week (from time of writing late mid-September), Bitcoin has gained ~4-5%, trading near $115,800–$116,500, while Ethereum rose ~5-8%, trading near $4,500–$4,650.
- ETF inflows into Bitcoin-spot ETFs have been strong (e.g. ~$2.3 billion in one week) signaling institutional interest.
- In options markets, ETH traders are eyeing $5,000-$6,000 by year-end, reflecting bullish expectations.
Possible Scenarios & Price Projections
| Scenario | Trigger | BTC Target | ETH Target |
|---|---|---|---|
| Base Case (25 bps cut, dovish tone, steady ETF inflows) | Fed cuts 25 bps, signals easing, markets calm | $130,000-$150,000 by end Q4 | $5,500-$6,500 by October / Q4 |
| Bull Case (larger cut or surprise dovishness, strong demand) | Fed cuts more than expected or opens door to further cuts; global liquidity high; strong institutional flows | $150,000-$200,000+ | $6,750+ and perhaps toward new highs over $7,000 if breakout confirmed |
| Bear / Caution Case | Rate cut already priced in; less dovish language; macro headwinds; technical breakdowns | Pull-back toward $100,000-$110,000 | ETH declines toward $4,200-$4,350 support zones |
Practical Implications for Investors & Use-Case Developers
- For traders/investors, this is a window to build long positions in BTC and ETH ahead of Fed move, but be ready for whiplash. Key is setting stops and watching Fed Chair Powell’s statements.
- For those exploring new crypto assets or DeFi / blockchain projects, easing liquidity helps: more capital flows into risk assets, and projects with real utility (staking, smart-contract usage, blockchain infrastructure) may attract both institutional and retail interest.
- Institutionalization continues: spot ETFs, corporate treasuries (e.g. BitMine itself holding large ETH), regulatory developments all point to crypto increasingly being treated as macro asset.
Summary & Outlook
In sum, Tom Lee’s forecast that Bitcoin and Ethereum are set for a “monster move” rests on a plausible scenario: Fed rate cuts + improved liquidity + strong ETF / institutional inflows + favorable technical setups. The upside potential over the next 3–4 months is substantial, perhaps in BTC’s case toward $140,000-$200,000 and in ETH’s toward $6,750 or more, if breakout conditions hold.
However, because much of the anticipated stimulus is already expected by markets, the actual Fed move must deliver in tone and details (future path, forward guidance) for the rally to sustain. Risks of profit-taking, technical breakdowns, and macro headwinds remain real.
For anyone looking for new crypto assets or business opportunities: keep an eye on infrastructure, emerging Layer-1/Layer-2s, DeFi protocols with real usage, and tools that help institutions enter safely (custody, compliance, auditability). These are likely to be among the secondary beneficiaries of a broader bullish run in BTC & ETH.
Conclusion
If you are seeking the next possible major returns in crypto, Bitcoin and Ethereum are front and center for Q4 2025. The convergence of macro policy (Fed easing), strong institutional interest, favorable technicals, and the historical precedent gives a compelling case for upside. That said, the path will likely involve volatility, news risk, and sharp reversals. Diligence, risk management, and attention to macro signals will be key. For builders and practitioners: this moment could also unlock practical opportunities in scaling, regulation, institutional tools, and real-world blockchain applications. Stay ready.
