Bitcoin Dips to $111K After Fed Rate Cut, $179M Liquidations Signal Volatility

• The Fed’s rate cut marked its first since 2023, ending quantitative tightening by December and aiming to support economic stability.

• Heavy liquidations hit major exchanges like Bybit and Hyperliquid, with longs comprising over 80% of the $179 million total.

• Bitcoin’s support level stands at $109,000, with resistance at $117,500, based on Fibonacci retracement analysis from recent highs.

Discover Bitcoin’s price reaction to the Fed’s latest rate cut, including liquidation impacts and market outlook. Stay informed on crypto trends and prepare for volatility. (152 characters)

What Happened to Bitcoin After the Fed Rate Cut?

Bitcoin after Fed rate cut experienced significant volatility, dropping to $111,000 as markets absorbed the central bank’s policy shift. The Federal Reserve lowered its benchmark rate by 25 basis points to a range of 3.75% to 4.00%, its first adjustment since 2023, while announcing the end of quantitative tightening by December. This initially sparked optimism but led to a reversal when Fed Chair Jerome Powell emphasized a data-dependent approach without committing to a preset course for additional easing.

Why Did Bitcoin Liquidations Surge After the FOMC Meeting?

The surge in Bitcoin liquidations after the FOMC meeting stemmed from overleveraged long positions, totaling more than $179 million across exchanges, as reported by Coinglass. Bybit and Hyperliquid saw the highest volumes, with longs accounting for over 80% of the wipeouts, reflecting traders’ misinterpretation of the dovish policy as an immediate bullish catalyst. Powell’s press conference introduced caution, noting that the Fed is not on a predetermined path for further rate reductions, which prompted a rapid unwind of optimistic bets. This imbalance highlights the crypto market’s sensitivity to macroeconomic signals, where short-term hype can lead to substantial corrections. Technical indicators, such as the liquidation chart, underscore this volatility, showing a sharp spike in forced closures post-announcement.

The liquidation chartshows a sharp imbalance between long and short positions, with longs accounting for over 80% of total liquidations. 

Bybit and 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.

Frequently Asked Questions

What Caused Bitcoin’s Price Drop After the Fed’s Rate Cut Announcement?

The price drop in Bitcoin after the Fed’s rate cut was driven by a combination of initial optimism followed by caution from Powell’s remarks. The 25-basis-point reduction to 3.75%-4.00% initially lifted prices, but the emphasis on economic data over preset easing plans led to liquidations exceeding $179 million, pushing BTC below $112,000 as per Coinglass figures.

How Might the End of Quantitative Tightening Affect Bitcoin Prices?

The Federal Reserve’s decision to end quantitative tightening by December introduces more liquidity into financial markets, which could support Bitcoin prices over time. Historically, increased liquidity has bolstered risk assets like cryptocurrencies, potentially stabilizing BTC around key support levels if paired with positive economic indicators.

Key Takeaways

• Fed’s Policy Shift Impact: The 25-basis-point rate cut to 3.75%-4.00% led to Bitcoin’s decline to $111,000, reversing early gains due to Powell’s measured tone on future policies.
• Liquidation Details: Over $179 million in positions were liquidated, predominantly longs on platforms like Bybit and Hyperliquid, highlighting leveraged risks in crypto trading.
• Market Outlook: Bitcoin may consolidate between $109,000 support and $117,500 resistance, with potential upside if ETF inflows resume amid improving liquidity conditions.

Conclusion

In summary, Bitcoin after Fed rate cut navigated turbulent waters, with the policy adjustment sparking volatility and significant liquidations, as tracked by sources like Coinglass and TradingView. As the central bank balances easing with caution, the broader liquidity environment from ending quantitative tightening positions crypto for potential stabilization. Investors should monitor upcoming economic data and ETF flows for signals on Bitcoin’s next move toward higher resistance levels.

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.

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.