Bitcoin Dips Post-Fed Rate Cut: Short-Term Bearish Tilt Possible

• Bitcoin price dropped to $109,265 post-announcement, with sellers maintaining control amid neutral RSI readings.

• Ethereum and other assets also declined, reflecting broader market disappointment over less aggressive easing signals.

• Bitcoin ETFs recorded $202.48 million in net inflows on October 28, totaling $62.3 billion, indicating sustained institutional interest despite short-term volatility.

Bitcoin’s reaction to the Fed rate cut reveals market dynamics: Explore what Powell’s comments mean for BTC’s near-term outlook and key support levels to watch. Stay informed on crypto trends.

What Happened to Bitcoin After the Fed Rate Cut?

Bitcoin’s response to the Federal Reserve’s recent rate cut was unexpectedly negative, with the cryptocurrency tumbling 3% to a low of $110,000 shortly after the announcement. Federal Reserve Chair Jerome Powell’s statements that a December rate cut is not guaranteed introduced hawkish tones that countered the anticipated dovish impact of the 0.25% reduction, bringing the federal funds rate to 3.75%-4.00%. This led to immediate selling pressure across Bitcoin, Ethereum, and other digital assets, as traders reacted to the deviation from more optimistic expectations.

How Did Technical Indicators Influence Bitcoin’s Post-Fed Movement?

The sell-off highlighted Bitcoin’s short-term vulnerabilities through various technical metrics. On the daily chart, the Relative Strength Index (RSI) stood at 44.87, placing it in neutral territory with a subtle bearish lean—far from oversold levels below 30 that might signal a rebound. Shorter four-hour charts showed an RSI of 36.38, approaching oversold conditions and underscoring building selling pressure, as noted by analysts tracking momentum indicators.

The Average Directional Index (ADX) further illustrated market hesitation, reading 17.29 on the daily timeframe and 24.22 on the four-hour, both below the 25 threshold that confirms a strong trend in either direction. This indecision suggests traders lack conviction, potentially leading to choppy price action without clear direction.

Exponential Moving Averages (EMAs) presented a mixed picture: The 50-day EMA remains above the 200-day EMA on daily charts, preserving a longer-term bullish structure often associated with sustained uptrends. However, the four-hour chart revealed a bearish ‘death cross’ where the 50-period EMA dipped below the 200-period, signaling short-term downside momentum. Despite this, hints of a potential golden cross reversal offer cautious optimism for a return to the upward channel established since mid-October.

Experts from financial analysis platforms emphasize that such EMA crossovers, while not infallible, often precede shifts in trader sentiment. As one market strategist observed, “Bitcoin’s EMA configurations underscore the tension between institutional accumulation and retail profit-taking in volatile post-policy environments.”

Frequently Asked Questions

Why Did Bitcoin Fall Despite the Fed’s Rate Cut?

The 0.25% rate cut was anticipated by 97% of market participants, per data from the CME FedWatch Tool, leaving little room for positive surprise and triggering a classic ‘sell the news’ event. Powell’s remarks on the uncertainty of further cuts added hawkish pressure, eroding bullish expectations and prompting outflows from risk assets like Bitcoin in the immediate term.

What Are the Key Support Levels for Bitcoin After the Rate Cut News?

Bitcoin’s immediate support lies at $110,000 to $111,000, with a breakdown potentially targeting $108,000 near the 200-day EMA. A psychological floor at $100,000 could come into play if selling intensifies, though institutional inflows suggest this deeper correction is not yet probable. Monitor volume for signs of stabilization.

Key Takeaways

• Post-Fed Volatility: Bitcoin’s 3% drop to $110,000 reflects hawkish surprises overriding the rate cut’s benefits, with prediction markets shifting from 75% bullish odds to 58%.
• Institutional Resilience: Despite the sell-off, Bitcoin ETFs attracted $202.48 million in inflows on October 28, bolstering cumulative totals to $62.3 billion and signaling long-term confidence.
• Watch for Reversal: Reclaiming $112,500 with rising ADX above 25 could pivot Bitcoin toward $120,000; failure may test $100,000 supports.

Conclusion

The Federal Reserve’s rate cut and subsequent Bitcoin price reaction underscore the cryptocurrency’s sensitivity to monetary policy nuances, where expectations often drive outcomes more than the events themselves. With technical indicators showing short-term bearish tilts but longer-term bullish foundations intact, Bitcoin’s path forward hinges on reclaiming key resistance levels amid ongoing institutional support. As markets digest Powell’s comments, investors should prepare for potential tests of $108,000 support while eyeing opportunities for renewed upside—staying vigilant will be key in this evolving landscape.

Bitcoin opened the daily session at $112,925 and dipped to $109,265 before the announcement, settling around $111,700 as sellers dominated. Sentiment on platforms like Myriad, developed by Dastan’s team, plummeted nearly 20%, with odds for a surge to $120,000 dropping sharply.

The anticipated cut failed to ignite a rally, as historical patterns show crypto benefits from lower rates emerge gradually through cheaper borrowing and risk appetite. A larger 0.50% cut or dovish guidance might have changed the narrative, but the status quo favored profit-taking.

Looking ahead, Bitcoin faces a pivotal moment: Holding above $110,000 could preserve the ‘Uptober’ momentum, though closing below the $114,200 monthly open risks a red month. Traders should track resistance at $113,000 and $114,500, alongside supports at $108,000 and $100,000.

Bitcoin price data. Image: Tradingview

On shorter timeframes, the bearish death cross contrasts with daily bullish signals, urging caution until momentum clarifies.

Bitcoin price data. Image: Tradingview

The views and opinions expressed here are for informational purposes only and do not constitute financial, investment, or other advice.