Bitcoin slips to $111K after Fed’s rate cut: $179M in long positions wiped out

Key Takeaways

How did Bitcoin react to the Fed’s coverage change?

Bitcoin fell to $111,000 after the Fed’s 25 foundation level price minimize, erasing earlier features as merchants digested Powell’s warning.

So what causes the volatility?

Greater than $179 million in lengthy positions have been liquidated after the announcement, led by Bybit and Hyperliquid, as merchants misinterpreted the easing sign.

Bitcoin [BTC] fell to round $111,000 on Wednesday as merchants digested the Federal Reserve’s first price minimize since 2023.

Regardless of the delicate shift, the crypto market skilled excessive volatility. Based on Coinglass information, greater than $179 million in lengthy positions on the foremost exchanges have been liquidated.

This adopted the Fed’s 25 foundation level minimize to a brand new vary of three.75%–4.00% and confirmed that quantitative tightening will finish in December.

Whereas the coverage shift offered optimism early within the session, Powell’s cautious tone later indicated the central financial institution is “not on a pre-set course” for additional cuts, dampening danger sentiment.

The variety of liquidations is rising as a result of merchants have misinterpreted the relief want

The liquidation chart exhibits a pointy imbalance between lengthy and quick positions, with lengthy positions accounting for greater than 80% of complete liquidations.

Bybit and Hyperliquid led the best way with the best outages, indicating over-optimism earlier than Powell’s press convention.

Supply: Coinglass

Bitcoin’s short-term help is now round $109,000, whereas resistance has fashioned at $117,500, in line with Fibonacci retracement information.

A sustained decline under $109,000 may set off additional liquidations in the direction of the $103,500 zone. This degree has served as a restoration base since mid-September.

Technical image: cautious consolidation forward

BTC’s every day chart exhibits the worth trapped between the important thing retracement ranges, with the 0.618 Fib close to $117,594 appearing as the following main upside hurdle. The RSI stays impartial, indicating that the market is consolidating relatively than getting into a brand new downtrend.

Supply: TradingView

Regardless of the post-FOMC pullback, analysts view the liquidity atmosphere as supportive.

With the Fed ending the QT and reducing charges, broader market liquidity may stabilize over the following month – a traditionally bullish sign for crypto as volatility subsides.

Outlook

For now, Bitcoin’s short-term worth will depend on macro sentiment. If Powell’s balancing act between dovishness and warning holds, BTC may stay between $109,000 and $117,500.

Nonetheless, renewed ETF inflows or weaker US information may set off a brand new take a look at of the $126,000 resistance zone.

Till then, merchants look like resetting their leverage, ready for clearer affirmation that the Fed’s pivot will translate into continued danger urge for food.