Key Takeaways
How did Bitcoin react to the Fed’s coverage shift?
Bitcoin dropped to $111,000 after the Fed’s 25 bps charge reduce, erasing earlier features as merchants digested Powell’s warning.
What’s driving volatility now?
Over $179 million in lengthy positions have been liquidated after the announcement, led by Bybit and Hyperliquid, as merchants misinterpret the dovish sign.
Bitcoin [BTC] fell to round $111,000 late Wednesday as merchants digested the Federal Reserve’s first rate of interest reduce since 2023.
Regardless of the dovish shift, the crypto market noticed heavy volatility. Greater than $179 million in lengthy positions have been liquidated throughout main exchanges, in keeping with Coinglass knowledge.
The transfer adopted the Fed’s 25-basis-point cut to a brand new goal vary of three.75%–4.00% and affirmation that quantitative tightening will finish by December.
Whereas the coverage shift injected optimism early within the session, Powell’s cautious tone later signaled that the central financial institution is “not on a preset course” for additional cuts — dampening threat sentiment.
Liquidations spike as merchants misinterpret the dovish flip
The liquidation chart reveals a pointy imbalance between lengthy and quick positions, with longs accounting for over 80% of whole liquidations.
Bybit and Hyperliquid led with the very best wipeouts, indicating overleveraged optimism earlier than Powell’s press convention.
Supply: Coinglass
Bitcoin’s short-term assist now sits close to $109,000, whereas resistance has fashioned at $117,500, in keeping with Fibonacci retracement knowledge.
A sustained drop under $109,000 might set off additional liquidations towards the $103,500 zone. This stage has served as a restoration base since mid-September.
Technical image: Cautious consolidation forward
BTC’s each day chart reveals the worth trapped between key retracement ranges, with the 0.618 Fib close to $117,594 appearing as the subsequent main upside hurdle. RSI stays impartial, suggesting that the market is consolidating slightly than coming into a brand new downtrend.
Supply: TradingView
Regardless of the post-FOMC pullback, analysts view the liquidity backdrop as turning extra supportive.
With the Fed ending QT and reducing charges, broader market liquidity might stabilize over the subsequent month — a traditionally bullish sign for crypto if volatility cools.
Outlook
For now, Bitcoin’s short-term course hinges on macro sentiment. If Powell’s balancing act between easing and warning holds, BTC might stay range-bound between $109,000 and $117,500.
Nevertheless, renewed ETF inflows or weaker U.S. knowledge might ignite one other check of the $126,000 resistance zone.
Till then, merchants look like resetting leverage, awaiting clearer affirmation that the Fed’s pivot will translate into sustained threat urge for food.