The Federal Reserve has cut rates for the second time this year — but over on the markets, there’s little cause for celebration.
With little economic data to rely on, Jerome Powell has warned that the central bank’s policymakers are struggling to agree on what should happen next.
Because of this, another reduction in December is “not a foregone conclusion,” despite the Fed indicating this was the plan earlier this year.
Bitcoin was down 4% over the past 24 hours at the time of writing, and just about holding above $110,000. Ether’s fallen by 5% too, dipping below $3,900.
Copper’s head of research Fadi Aboualfa told Cryptonews that crypto traders had prepared for today’s Fed meeting ahead of time — and said the “real signal” now lies in inflows to BTC ETFs, and whether institutional buying holds steady.
“Bitcoin has moved beyond the retail sentiment cycle — volatility has compressed because the holder base is more patient, and Wall Street advisers are the ones allocating serious capital now. The more Bitcoin behaves like a mature asset, the stronger the long-term compounding story becomes: that stability is precisely what enables supply squeezes to build.”
Nonetheless, Aboualfa did warn that Bitcoin has the potential to fall further in the short-term. He believes “a quick move” to $108,000 is possible, but noted that “dips keep getting absorbed by account building multi-month positions.”
“A close above $111,000 keeps the structural pattern intact that we’ve seen before major bull run-ups. Bears still need to prove they can do more than shake weak hands.”
As previously reported by Cryptonews, questions have been asked about whether continued interest rate cuts are wise — especially given releases from the Bureau of Labor Statistics have been delayed or postponed because of the government shutdown, with no end in sight.
Copper argues that BTC had a “remarkably familiar setup” to October 2024 ahead of the Fed decision — with a “wait-for-catalyst mentality that defined Bitcoin’s behavior the last time monetary expectations pivoted.”
Prior to the FOMC’s meeting, the crypto company had described $114,600 as the price point where a breakout would become real — with “momentum ignition likely” above this level. That hasn’t happened, meaning “the door remains open to another test by the bears.”
Further catalysts are on the horizon — with GDP data the next to emerge. Setting out what could prove most beneficial for the crypto markets, Aboualfa wrote:
“The most supportive combination for Bitcoin would be steady growth and a Federal Reserve that frames policy in terms of lag effects and future uncertainty rather than further tightening needs. The market wants policy stability.”
Overall, Copper’s analysis argues that BTC has failed to see off bearish threats — and a “transition from defense to offense” has been underway.
“Bitcoin has been climbing back from a clean pivot low at $103,000. It recovered the midrange. It printed higher lows. It tested supply. It now sits beneath resistance that has rejected price twice already … Bears have had several chances to unwind the move and failed.”
The Fed’s decision was 10-2 in favor of a 25 basis point cut. One of the two dissenters was Governor Stephen Miran, a Trump pick who has echoed the president’s calls for far more aggressive interest rate cuts. Meanwhile, Jeffrey Schmid had argued that rates should be held because inflation remained persistently high.
Over on Wall Street, both the S&P 500 and the Dow Jones indices lost ground during Jerome Powell’s news conference. However, these pullbacks could be short lived given the likes of Microsoft, Amazon and Meta are all announcing their latest earnings after the closing bell. Given these three tech giants collectively have a market capitalization of $10 trillion, upbeat results could put the stock market on a strong footing in after-hours trading — and this could feed through to BTC.
The Coin Bureau’s analyst Nic Puckrin told Cryptonews that the long-term investment case for Bitcoin remains intact, but cautioned against leverage.
“The ongoing uncertainty, which has dominated markets all year, is perhaps the reason we are not seeing more euphoria in the cryptocurrency space. Indeed, Bitcoin is exhibiting a potential double top pattern, a bearish signal, and daily exchange volumes have dropped off a cliff.”
The post Bitcoin Falls as Federal Reserve Cuts Interest Rates: Are Bears in Control? appeared first on Cryptonews.
