Bitcoin’s price dipped to $109,200 on Wednesday, marking a notable decline ahead of the U.S. Federal Reserve’s latest policy announcement.
The Fed confirmed a 25-basis-point interest rate cut, aligning with market expectations, but Bitcoin’s 6% slide from its Monday rally to $116,400 caught traders off guard.
Analysts attributed the drop to short-term risk aversion before Fed Chair Jerome Powell’s press conference, despite the anticipated cut.
Market Expectations vs. Reality
According to the Fed’s latest dot plot, policymakers expect three additional cuts in 2025.
Analysts at Goldman Sachs project at least two more 25-basis-point cuts by mid-2026, potentially bringing the benchmark rate down to the 3–3.25% range.
This outlook should theoretically support risk assets like Bitcoin, yet the crypto’s near-term movements diverged from expectations.
“Recent history has shown that the FOMC leads to a price drop in BTC, followed by a move up,” said analysts at Hyblock, a crypto analytics firm. “If price does dip post-FOMC and signs of bullish confluence emerge, such as bid-heavy orderbooks, it would likely present good opportunities for investors.”
Investors Eye Broader Economic Concerns
With rate cuts largely priced in, traders are now focusing on broader macroeconomic risks.
These include the rise in U.S. layoffs, the potential long-term impact of President Trump’s tariff measures, and uncertainty around whether the booming artificial intelligence sector represents a sustainable trend or a speculative bubble.
These factors could play a more significant role in shaping Bitcoin’s medium-term trajectory than Wednesday’s Fed decision itself.
End of Quantitative Tightening
One key takeaway from the FOMC’s statement was confirmation that the Fed will end its balance sheet reduction on December 1, marking the conclusion of its quantitative tightening program.
This policy shift may inject additional liquidity into markets over the coming months, potentially supporting risk assets like Bitcoin — though near-term volatility is expected to remain high.
