Bitcoin rose above $111,000 on Tuesday, buoyed by investor optimism that the US Federal Reserve will begin cutting interest rates later this month. By mid-morning in New York, the cryptocurrency traded at $111,520, up 2.4% or $2,610.

The move comes after a turbulent few weeks for Bitcoin, which has retreated about 12% since hitting a record above $124,000 in mid-August. Signs of a cooling US labor market and a weakening dollar have revived demand for risk assets, with traders now pricing in an 89-90% chance of a 25-basis-point cut at the Fed's September 16-17 meeting. Fed Governor Christopher Waller reinforced those expectations last week, saying he sees cuts beginning in September and continuing over the next 3-6 months.

Bitcoin rally strengthens

July's nonfarm payrolls report, which showed job creation slowing to just 73,000, has added to the dovish case. Investors are now awaiting Friday's August data, which analysts say could "solidify the case for a rate cut" if weakness continues. Meanwhile, the dollar has slipped to multi-week lows against other major currencies, making assets denominated in dollars, such as gold and Bitcoin, more attractive. Gold itself reached a fresh high near $3,500 an ounce.

Corporate demand also underpinned Bitcoin's rally. Strategy, the company formerly known as MicroStrategy, disclosed a new $449 million purchase of 4,048 Bitcoin, boosting its total holdings to 636,505 coins valued at more than $70 billion. CEO Michael Saylor said the firm is sitting on about $23 billion in unrealized gains, calling Bitcoin a long-term treasury asset. The purchase was financed through equity sales, signaling continued institutional conviction.

Crypto divergence

Not all crypto markets shared in the momentum. Tokens linked to US President Donald Trump's family venture,  World Liberty Financial ($WLFI), dropped sharply in their trading debut, underscoring investor caution. By contrast, meme coins with political themes have seen speculative rallies in recent weeks.

Read more: Crypto group backed by Trump sons scouts Bitcoin firms in Asia

Among major altcoins, Ethereum slipped 0.8% to $4,328, while XRP and Solana gained around 2%. Dogecoin edged lower. Analysts note that Bitcoin appears better supported technically, while Ethereum's Relative Strength Index (RSI) has fallen close to oversold territory, highlighting uneven sentiment across the market.