Key Takeaways
How did Bitcoin react to the Fed’s policy change?
Bitcoin fell to $111,000 after the Fed’s 25 basis point rate cut, erasing earlier gains as traders digested Powell’s warning.
So what causes the volatility?
More than $179 million in long positions were liquidated after the announcement, led by Bybit and Hyperliquid, as traders misinterpreted the easing signal.
Bitcoin [BTC] fell to around $111,000 on Wednesday as traders digested the Federal Reserve’s first rate cut since 2023.
Despite the mild shift, the crypto market experienced high volatility. According to Coinglass data, more than $179 million in long positions on the major exchanges were liquidated.
This followed the Fed’s 25 basis point cut to a new range of 3.75%–4.00% and confirmed that quantitative tightening will end in December.
While the policy shift provided optimism early in the session, Powell’s cautious tone later indicated the central bank is “not on a pre-set course” for further cuts, dampening risk sentiment.
The number of liquidations is increasing because traders have misinterpreted the relaxation wish
The liquidation chart shows a sharp imbalance between long and short positions, with long positions accounting for more than 80% of total liquidations.
Bybit and Hyperliquid led the way with the highest outages, indicating over-optimism before Powell’s press conference.
Source: Coinglass
Bitcoin’s short-term support is now around $109,000, while resistance has formed at $117,500, according to Fibonacci retracement data.
A sustained decline below $109,000 could trigger further liquidations towards 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 the key retracement levels, with the 0.618 Fib near $117,594 acting as the next major upside hurdle. The RSI remains neutral, indicating that the market is consolidating rather than entering a new downtrend.
Source: TradingView
Despite the post-FOMC pullback, analysts view the liquidity environment as supportive.
With the Fed ending the QT and cutting rates, broader market liquidity could stabilize over the next month – a historically bullish signal for crypto as volatility subsides.
Outlook
For now, Bitcoin’s short-term price depends on macro sentiment. If Powell’s balancing act between dovishness and caution holds, BTC could remain between $109,000 and $117,500.
However, renewed ETF inflows or weaker US data could trigger a new test of the $126,000 resistance zone.
Until then, traders appear to be resetting their leverage, waiting for clearer confirmation that the Fed’s pivot will translate into continued risk appetite.