Key Takeaways
How did Bitcoin react to the Fed’s policy shift?
Bitcoin dropped to $111,000 after the Fed’s 25 bps rate cut, erasing earlier gains as traders digested Powell’s warning.
What’s driving volatility now?
Over $179 million in long positions were liquidated after the announcement, led by Hyperliquid, as traders misread the dovish signal.
Bitcoin [BTC] fell to around $111,000 late Wednesday as traders digested the Federal Reserve’s first interest rate cut since 2023.
Despite the dovish shift, the crypto market saw heavy volatility. More than $179 million in long positions were liquidated across major exchanges, according to Coinglass data.
The move followed the Fed’s 25-basis-point cut to a new target range of 3.75%–4.00% and confirmation that quantitative tightening will end by December.
While the policy shift injected optimism early in the session, Powell’s cautious tone later signaled that the central bank is “not on a preset course” for further cuts — dampening risk sentiment.
Liquidations spike as traders misread the dovish turn
The liquidation chart shows a sharp imbalance between long and short positions, with longs accounting for over 80% of total liquidations.
Hyperliquid led with the highest wipeouts, indicating overleveraged optimism before Powell’s press conference.
Source: Coinglass
Bitcoin’s short-term support now sits near $109,000, while resistance has formed at $117,500, according to Fibonacci retracement data.
A sustained drop below $109,000 could trigger further liquidations toward the $103,500 zone. This level has served as a recovery base since mid-September.
Technical picture: Cautious consolidation ahead
BTC’s daily chart shows the price trapped between key retracement levels, with the 0.618 Fib near $117,594 acting as the next major upside hurdle. RSI remains neutral, suggesting that the market is consolidating rather than entering a new downtrend.
Source: TradingView
Despite the post-FOMC pullback, analysts view the liquidity backdrop as turning more supportive.
With the Fed ending QT and lowering rates, broader market liquidity could stabilize over the next month — a historically bullish signal for crypto if volatility cools.
Outlook
For now, Bitcoin’s short-term direction hinges on macro sentiment. If Powell’s balancing act between easing and caution holds, BTC could remain range-bound between $109,000 and $117,500.
However, renewed ETF inflows or weaker U.S. data could ignite another test of the $126,000 resistance zone.
Until then, traders appear to be resetting leverage, awaiting clearer confirmation that the Fed’s pivot will translate into sustained risk appetite.
