Bitfinex Report: Fed Rate Cuts Trigger BTC Market Volatility

Bitfinex Alpha reports that Bitcoin, driven by short-covering and speculative buying, fell to the $112,500 range following the Federal Reserve's rate cut, briefly reaching $118,000. While profit-taking triggered market volatility, derivatives markets have shifted from a risk-off stance to a more balanced positioning, alleviating downside concerns. On-chain data shows that Bitcoin is currently trading above its 95% supply cost (approximately $115,200), with most holders returning to profitability. The Federal Reserve's first rate cut since 2024 highlights its ability to strike a delicate balance between a weak labor market and persistently high inflation. Macroeconomic pressures, sovereign digital currency initiatives, and regulatory breakthroughs are shaping the global cryptocurrency landscape and have the potential to redefine the digital asset market.