Key points:
The sell-off of Bitcoin intensified after the Federal Reserve lowered rates by 25 basis points.
The decline in crypto indicates that traders are considering macroeconomic challenges, such as a faltering jobs market and inflation, even though they expect interest rate cuts to continue until 2026.
Bitcoin (BTC) fell to $109,200 ahead of Wednesday’s US Federal Reserve decision to reduce interest rates by 25 basis points. While traders might have anticipated some risk-off behavior prior to Fed Chair Jerome Powell’s announcement, the 6% decline from its Monday rally to $116,400 may be sharper than expected, particularly since analysts had widely predicted a 25 basis point cut.
The Fed’s dot plot currently indicates a baseline of three cuts in 2025. Analysts at Goldman Sachs already forecast at least two more 25 basis point cuts by March and June of 2026, which would place the Fed’s benchmark in the 3% to 3.25% range. Keeping this perspective in mind, Bitcoin’s near-term price movements contradict traders’ expectations.
According to analysts at Hyblock, a crypto analytics firm:
“Recent history has demonstrated that FOMC meetings often precede a price drop in BTC, followed by a recovery. This pattern held true in both no rate change and rate cut scenarios. If prices decrease post-FOMC and bullish indicators appear, such as bid-heavy orderbooks, it could present valuable entry points for investors.”
With the market consensus tilting toward anticipated rate cuts, investors are increasingly focused on “what comes next, beyond the cuts.” Factors like rising US job layoffs, the long-term effects of President Trump’s tariff policies, and whether the artificial intelligence sector is driven by speculation or solid fundamentals occupy traders’ minds.
Related: Price predictions 10/29: BTC, ETH, BNB, XRP, SOL, DOGE, ADA, HYPE, LINK, BCH
During Powell’s FOMC press conference on Wednesday, traders will be keen to see these issues addressed, as they may affect Bitcoin’s price action more significantly than today’s interest rate cut, which was largely expected due to the unanimous consensus on a 0.25% reduction.
A significant update in the FOMC statement was the confirmation that the Fed will cease reducing its balance sheet on December 1, signaling an end to quantitative tightening.
This article does not constitute investment advice or recommendations. Every investment and trading move carries risk, and readers should conduct their own research before making decisions.
