Main Highlights:
Bitcoin’s decline intensified following the Federal Reserve’s 25 basis point interest rate cut.
The downturn in crypto indicates that traders are considering macroeconomic challenges such as a weakening job market and inflation, even as they expect interest rate cuts to persist into 2026.
Bitcoin (BTC) price dropped to $109,200 just before the US Federal Reserve announced a 25 basis point interest rate cut on Wednesday. While traders might have anticipated a level of caution before Fed Chair Jerome Powell’s announcement, BTC’s decline of 6% from its Monday peak of $116,400 may have been sharper than expected, especially given that analysts anticipated a 25 basis point reduction.
The Fed’s dot plot currently indicates a baseline of three cuts in 2025. Goldman Sachs analysts predict at least two more 25 basis point cuts by March and June of 2026, leading to a Fed benchmark in the 3% to 3.25% range. With this outlook, Bitcoin’s short-term price movements appear to contradict traders’ expectations.
Hyblock analysts commented:
“Past trends indicate that FOMC meetings often result in a BTC price drop, followed by recovery. This pattern occurred in both no rate change and rate cut scenarios (including the last one). If prices dip after FOMC and bullish indicators such as bid-heavy order books arise, it may present prime opportunities for investors.”
As the market anticipates ongoing rate cuts, investors are increasingly focused on “what follows beyond the cuts.” Concerns surrounding rising US job layoffs, the extended effects of President Trump’s tariff conflict, and the potential speculation bubble versus solid fundamentals in the artificial intelligence sector are top of mind for traders.
Related: Price forecasts 10/29: BTC, ETH, BNB, XRP, SOL, DOGE, ADA, HYPE, LINK, BCH
Traders will seek clarity on these issues during Powell’s FOMC press conference on Wednesday, which could influence Bitcoin’s price more than today’s anticipated interest rate cut, as the 0.25% reduction was largely expected with a 100% consensus.
An important update to the FOMC statement confirmed that the Fed will stop shrinking its balance sheet on December 1, marking the end of quantitative tightening.
This article does not provide investment advice or recommendations. All investment and trading actions involve risk, and readers should conduct their own research before making any decisions.
