Bitcoin price falls under — Why is the Fed’s hawkish rate cut crashing Bitcoin again?

In a dramatic turn, Bitcoin price has plunged below , erasing recent gains and sending shockwaves through the crypto market. This drop comes hot on the heels of the U.S. Federal Reserve’s latest decision—a 25 basis points (bps) rate cut that markets had anticipated, but with a twist: a hawkish tone that has crushed risk appetite. Over $250 million in long positions were liquidated in hours, amplifying the sell-off. But what’s really driving this BTC USD crash? Let’s break it down step by step.

What Happened to Bitcoin Price Today?

The Bitcoin price today started the day testing highs near $94,000 but quickly reversed course. By evening, BTC/USD had tumbled below $90,000, marking a roughly 4-5% decline in a single session. This isn’t just a minor dip—it’s part of a broader risk-off move across assets.

• Key Levels: Immediate support at $85,569, with further downside risks toward $82,000 if breached.
• Resistance: Bulls need to reclaim $94,253 to regain momentum.
• RSI Alert: The Relative Strength Index (RSI) on the daily chart has sunk to 44, signaling oversold conditions and potential for a short-term bounce—but only if macro fears ease.

U.S. stock futures are also in the red, with the Dow, S&P 500, and Nasdaq dragging lower. Tech giants like Oracle and Nvidia are leading losses, underscoring a flight from high-risk assets. Bitcoin, often correlated with these markets, is bearing the brunt.

The Fed’s Hawkish Rate Cut: Explained

The Federal Reserve delivered its third consecutive rate cut, trimming the federal funds rate by 25 bps to a range of 4.50%-4.75%. On the surface, this is dovish—lower rates should boost liquidity and support risk assets like Bitcoin. But Jerome Powell’s press conference painted a different picture.

Why hawkish?

1. Fewer Future Cuts: Powell signaled that policymakers expect only two more cuts in 2025, far fewer than the four priced in by markets pre-announcement. This ‘higher for longer’ vibe disappointed investors hoping for aggressive easing.
2. Inflation Concerns: Sticky inflation data and a resilient labor market mean the Fed isn’t rushing to slash rates further. Powell emphasized data-dependence, hinting at pauses if inflation rebounds.
3. Balance Sheet Runoff: The Fed will continue quantitative tightening (QT), reducing its balance sheet by $25 billion monthly in Treasuries. Less liquidity means tighter financial conditions.

The result? Markets repriced expectations, yields on U.S. Treasuries spiked, and the dollar strengthened. Bitcoin, as a high-beta asset, amplifies these macro shifts, leading to the BTC price fall under $90,000.

“The Fed’s pivot to a more cautious stance has reignited fears of a ‘soft landing’ turning bumpy, hitting crypto hardest.”

On-Chain Data: Whales Pull Back Amid Liquidation Storm

While prices cratered, on-chain metrics reveal telling shifts:

• $250M Liquidations: Mostly long positions wiped out, with over 70% on major exchanges like Binance and Bybit. Leverage was too high in a volatile environment.
• Whale Activity: Large holders (whales) have reduced exchange deposits by 2-3% in the past week, signaling caution. They’re moving BTC to cold storage, potentially setting up for accumulation at lower levels.
• Exchange Flows: Net outflows from exchanges hit 15,000 BTC last week, a bullish long-term sign despite the pain.

Despite the chaos, Bitcoin ETFs showed resilience with $220 million in inflows on the day—led by BlackRock’s IBIT and Fidelity’s FBTC. This suggests institutional buying the dip, which could stabilize prices if retail panic subsides.

Technical Analysis: Where Does BTC Go From Here?

Zooming into charts:

• Daily Chart: BTC broke below the 50-day EMA ($92,500), confirming bearish momentum. The 200-day EMA at $88,000 is next support.
• Weekly View: Still above key uptrend line from November lows. A hold above $85k keeps the bull case alive.
• Indicators: MACD shows bearish crossover; Stochastic oscillator oversold. Watch for divergence signaling reversal.

Short-term Outlook: Deeper pain to $85,569 possible if stocks keep sliding. But oversold RSI and ETF inflows could spark a rebound to $92,000.

Broader Market Context: Stocks, Gold, and Crypto Correlation

Bitcoin doesn’t exist in a vacuum. Nasdaq’s 2% drop mirrors BTC’s pain, driven by AI spending shocks (e.g., Oracle’s earnings miss). Meanwhile:

• Gold: Dipped slightly but holds above $2,600/oz, as safe-haven flows compete with rate sensitivity.
• Silver Rumors: Banks like JPMorgan allegedly stockpiling, hinting at precious metals hedging inflation fears.
• Altcoins: Ethereum down 6%, Solana 8%—full risk-off mode.

The Fed’s decision questions the ‘Bitcoin as digital gold’ narrative. In high-rate environments, BTC behaves more like a tech stock than a store of value.

What’s Next for Bitcoin? Bullish Catalysts Ahead

Despite the crash, reasons for optimism persist:

1. Post-Halving Cycle: Historically, BTC consolidates before new highs 6-12 months after halvings. We’re only 6 months in.
2. Trump Factor: Pro-crypto policies could counter Fed tightness if tariffs boost inflation (and cuts).
3. Institutional Adoption: ETF inflows now average $1B/week. Nation-state buying rumors add fuel.
4. 2025 Predictions: Analysts eye $120,000-$150,000 if macro improves.

Trading Tips:

• Buy dips above $85k with stops below.
• Avoid leverage until volatility cools.
• Diversify into BTC ETFs for long-term exposure.

Final Thoughts: Is This a Buying Opportunity or More Pain?

The Fed’s hawkish rate cut has slammed Bitcoin price under $90,000, but history shows crypto thrives on volatility. Liquidations have cleared weak hands, whales are accumulating, and institutions remain committed. If support holds, $100,000 is back in play by year-end. Stay vigilant—monitor Fed minutes, jobs data, and on-chain flows for the next move.

What do you think? Will BTC rebound or test $80k? Share in the comments below and subscribe for daily crypto updates!

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