Bitcoin Price Analysis: BTC Slumps As Fed Cuts Interest Rates

Bitcoin (BTC) nosedived late on Wednesday as the Federal Reserve announced a 25 bps rate cut following the FOMC meeting. The decline was part of a broader market drop that pulled the global crypto market capitalization below $4 trillion. 

Markets turned cautious as Fed Chair Jerome Powell tempered expectations of another rate cut, stating that a further reduction in December is “not a foregone conclusion.”

Michael Saylor’s Bold Prediction 

Strategy executive chairman and co-founder Michael Saylor believes Bitcoin (BTC) could yet reach $150,000 by the end of the year. Saylor highlighted the Securities and Exchange Commission's (SEC) embrace of tokenized securities, the endorsement of stablecoins to protect dollar dominance, and the overall regulations in the US as reasons for his bullishness. 

“I think that these 12 months have probably been the best 12 months in the history of the industry. Our expectation right now is that by the end of the year, it should be about $150,000, and that's the consensus of the equity analysts who cover our company and the Bitcoin industry.”

Saylor’s prediction comes as BTC and the broader market struggle to regain momentum after the October 10 market crash that led to billions being wiped out from the market. According to the Kobeissi Letter, the market crash was due to short-term technical factors, and long-term market trends were intact. 

“We believe this crash was due to the combination of multiple sudden technical factors. It does NOT have long-term fundamental implications. A technical correction was overdue, we think a trade deal will be reached, and crypto remains strong.”

Spot Bitcoin ETFs Post Significant Outflows 

US spot Bitcoin ETFs reported $470 million in outflows on Wednesday as Bitcoin (BTC) briefly slumped to a low of $107,924. According to data from Farside Investors, Fidelity’s FBTC led the outflows with $164 million, followed by ARK Invest’s ARKB, which reported $143 million in outflows. Meanwhile, BlackRock’s IBIT recorded $88 million in outflows. Grayscale’s GBTC recorded $65 million in outflows, while Bitwise’s BITB recorded marginal outflows of $6 million. 

The outflows came after the ETFs recorded steady gains, reporting $149 million in inflows on Monday and over $200 million on Tuesday. The latest outflows have reduced the cumulative net inflows into spot Bitcoin ETFs to $61 billion, while total assets under management have declined to $149 billion. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) has registered substantial selling pressure this week after failing to reclaim $116,000 on Monday. The selloff intensified on Wednesday after Fed Chair Jerome Powell took a cautious stance about further rate cuts, stating that a cut in December was not a foregone conclusion at this point. While the rate cut was widely expected, Powell’s comments caught the markets off guard. Powell highlighted the Federal Reserve’s data-dependent stance and pointed to elevated inflation levels and rising downside risks that will keep any moves by the Fed on hold. 

“In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”

It wasn’t just the cryptocurrency market that felt jittery following Powell’s comments. The Dow Jones Industrial Average fell 166 points, while the S&P 500 fell 0.4% and the Nasdaq Composite fell 0.1%. Bitcoin slumped below $110,000 following the news, falling to an intraday low of $107,924 during the ongoing session before reclaiming $110,000. 

Many traders expected some degree of risk-off ahead of Fed Chair Jerome Powell’s announcement, but the nearly 6% decline since its Monday rally is more than what many expected. Analysts at Goldman Sachs have predicted at least two more rate cuts by March and June 2026, putting the Fed’s benchmark rate between 3% and 3.25%. As such, BTC’s near-term price action is contrary to market expectations. A group of analysts from crypto analytics company Hyblock stated, 

“Recent history has shown that the FOMC leads to a price drop in BTC, followed by a move up. This was the case in both the no rate change, and rate cut (last one) scenarios. 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.”

BTC ended the previous weekend in positive territory, rising 1.37% on Sunday and settling at $108,676. Buyers retained control on Monday as the price rose nearly 2% to reclaim $110,000 and settle at $110,568. BTC surged to an intraday high of $114,082 on Tuesday. However, it lost momentum after reaching this level and dropped 1.99% to $108,362. Selling pressure persisted on Wednesday as BTC fell 0.72% to a low of $106,639 before settling at $107,585. Despite the selling pressure, the price recovered on Thursday, rising over 2% to cross $110,000 and settle at $110,116. BTC continued pushing higher on Friday, rising almost 1% to $111,042.

Source: TradingView

Price action remained positive over the weekend, with BTC rising 0.56% on Saturday and settling at $111,666. Bullish sentiment intensified on Sunday thanks to positive macroeconomic developments, including positive trade talks between the US and China, and rising odds of a rate cut. As a result, BTC rose 2.58% to cross $114,000 and settle at $114,548. The flagship cryptocurrency reached an intraday high of $116,410 on Monday. However, it lost momentum after reaching this level and settled at 114,087, ultimately dropping 0.40%. BTC rallied to an intraday high of $116,114 on Tuesday as bullish sentiment persisted. However, it lost momentum again and dropped over 1% to $112,906. Selling pressure intensified on Wednesday as the price fell nearly 3% and settled at $110,032. BTC plunged to an intraday low of $107,924 during the ongoing session. The flagship cryptocurrency is facing heightened volatility during the ongoing session and is marginally up, trading around $110,300.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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