- Bitcoin price dropped to a low of $108,000 after Fed Chair Powell indicated a December rate cut is ‘not a foregone conclusion.’
- The Federal Reserve cut its benchmark rate by 25 basis points, but the hawkish tone triggered $817 million in crypto liquidations.
- This reaction highlights crypto’s sensitivity to monetary policy, potentially delaying Bitcoin’s push toward new all-time highs.
Bitcoin experienced a sharp decline yesterday, falling below $110,000 shortly after the U.S. Federal Reserve announced a 25 basis point interest rate cut. Data from CoinDesk shows the cryptocurrency dipped to around $108,000, marking a 3.8% drop within hours. This move came despite the anticipated rate reduction, as investors focused on the Fed’s cautious forward guidance.
The Fed’s decision brought the target range to 4.5%-4.75%, aligning with market expectations. However, Chair Jerome Powell’s press conference introduced uncertainty. “A decision to cut in December is not a foregone conclusion,” Powell stated, as reported by News.Bitcoin.com. This hawkish tilt scaled back projections for additional easing, prompting a risk-off sentiment across financial markets.
Crypto liquidations surged amid the volatility. According to Seeking Alpha, over $817 million in positions were liquidated, with Bitcoin and Ethereum accounting for the majority. Ethereum also tumbled, dropping about 4% to test support levels around $3,600.
Analysts note this as a classic ‘buy the rumor, sell the news’ event. “The market had priced in more aggressive cuts, but Powell’s comments reset expectations,” said an analyst quoted in Decrypt. For context on market dynamics, refer to Bitcoin details and Ethereum insights from CryptoPress.
Risks include further downside if economic data softens. Bitcoin has since recovered slightly to around $110,500, per Barron’s, but traders warn of potential retests of lower supports. Sustained hawkish policy could hinder crypto’s institutional inflows, though long-term bulls remain optimistic on Bitcoin’s scarcity narrative.
More articles on Fed impacts on crypto can be found at CryptoPress.site.
Disclaimer: This article is for informational purposes only and does not constitute advice of any kind. Readers should conduct their own research before making any decisions.
