Key TakeawaysBitcoin (BTC) price sits around $110,161, up 0.11% intraday but still down 2.06% over 24 hours.The Federal Reserve’s October 28–29 FOMC meeting delivered a 25-basis-point rate cut to 3.75%–4.00%, marking the second consecutive reduction.Hawkish tone from Chair Jerome Powell and U.S.-China tariff tensions weigh on crypto sentiment despite easing policy.Technical weakness persists below $113K, while ETF inflows of $839M highlight sustained institutional interest in Bitcoin. Macro Crossroads: The Fed’s Rate Decision and Crypto Market ImpactThe crypto market is once again at a crossroads as global investors focus on the U.S. Federal Reserve’s October 28–29, 2025 FOMC meeting. After more than a year of economic turbulence, the Fed’s decision to continue cutting rates carries implications far beyond Wall Street.The Federal Open Market Committee reduced the federal funds rate by 25 basis points, to a target range of 3.75%–4.00%, following its first cut in over a year this September. Futures markets had priced in a 97% probability of this move, but investor attention quickly shifted to Powell’s cautious tone and the lack of updated projections. The Fed’s decision comes amid mixed economic signals. The latest Consumer Price Index (CPI) data—limited due to the ongoing federal government shutdown—suggests headline inflation has slowed to around 3.0% year-over-year, with core inflation near similar levels. Powell noted that while inflation remains above target, the disinflationary trend is encouraging, particularly given the temporary inflationary effects of new import tariffs and elevated energy prices.With Bitcoin holding above $110,000 and DeFi platforms showing tentative signs of renewed activity, the stage is set for either a breakout or a reset, depending on how dovish the Fed remains. Wall Street and Crypto Before the Rate CutHeading into the meeting, both traditional and crypto markets displayed a mix of anticipation and restraint.U.S. equities rallied to record highs, with the S&P 500, Nasdaq, and Dow Jones boosted by strong tech earnings.The 10-year Treasury yield eased to around 4.0%, reflecting expectations for a continued easing cycle.Gold prices hit $4,030/ounce, while Bitcoin stabilized near $113,000 after a sharp October correction that wiped out over $1 billion in leveraged positions.However, crypto liquidity remained thin—order book depth dropped to about 40% of normal levels, showing that even bullish traders were cautious ahead of the Fed’s announcement.Currently, gold has also not performed as strongly as before, with Bloomberg data showing that gold-backed ETFs experienced total outflows of about 1.064 million ounces (nearly $4.1 billion) since October 22. Gold is now hovering around $4000/ounce, having declined 6% on October 21.Despite near-term hesitation, institutional confidence remained firm. Bitcoin ETFs logged consistent inflows, with BlackRock and Fidelity among the asset managers seeing demand. Still, corporate treasuries like Strategy slowed BTC accumulation, and some firms took profits ahead of potential volatility. Fed Adopts Risk-Management Mode Amid Data BlackoutPowell acknowledged that the federal shutdown left the Fed “flying blind,” with critical labor and inflation data unavailable. Yet, alternative indicators confirm that the economy is slowing:Unemployment has edged up to 4.3% from 4.0% earlier in the year.Businesses are hiring more cautiously amid tighter immigration policies.Liquidity in short-term funding markets is showing stress.This has prompted the Fed to adopt a risk-management approach, easing policy preemptively to avoid a deeper downturn. Several officials have hinted that quantitative tightening (QT) could pause soon—potentially by year-end—marking a pivot away from 2022–2023’s aggressive tightening cycle.For crypto markets, this evolving stance could mean a more supportive liquidity environment heading into 2026. Technical Overview: Bitcoin Tests Key Support LevelsBitcoin’s price remains under technical pressure after losing the $113K support, triggering automated sell orders.Relative Strength Index (RSI 14): 45.1, showing neutral momentum.Momentum (10): –351.0, and Awesome Oscillator: –1,273.0, both reflecting negative bias.MACD (12,26): –890.1, signaling potential trend exhaustion.Simple Moving Average (30): $114,283, above the current price, highlighting resistance overhead.Source: TradingViewThese readings indicate low conviction among traders, with spot trading volumes up 6.73% to $69.5B, reflecting distribution-driven activity. BTC continues to consolidate between $108K and $116K, as market participants await macro clarity. ETF Flows and Market Structure: Institutional Accumulation PersistsWhile retail participation has cooled, institutional demand remains resilient.Bitcoin ETFs attracted $839 million in inflows, contrasting with $4.1 billion in gold ETF outflows.231 large wallets added 10+ BTC each in the past 10 days, while 37,000 smaller wallets exited positions.This divergence highlights the shift from retail speculation to institutional accumulation, as digital assets increasingly compete with traditional stores of value. After the Fed Rate Cut: Five Factors to WatchDecember FOMC Meeting: Markets expect another rate cut (Dec 9–10, 2025), contingent on incoming data.Inflation and Labor Data: Delayed CPI, PCE, and payroll reports will steer future policy and crypto sentiment.Quantitative Tightening (QT): A potential pause would inject liquidity—a historically bullish catalyst for Bitcoin.Geopolitical Factors: U.S.-China trade talks and regulatory headlines could drive market swings.ETF Flows and Institutional Demand: Sustained inflows to Bitcoin and Ethereum ETFs signal long-term conviction, even amid volatility. BTC Outlook: Key Levels to WatchThe near-term BTC trajectory depends on its ability to hold $108K support.Below that, downside targets align near $101K.Reclaiming $113K could restore bullish momentum toward $120K–$125K.The Fed’s dovish pivot offers a macro tailwind, but traders remain cautious amid lingering global uncertainty and data scarcity.
Catherine
