Bitcoin Plunges to $100K Following Fed’s Hawkish Rate Cut and 2025 Outlook
After the Federal Reserve’s most recent monetary policy decision, Bitcoin (BTC) fell sharply, declining 4.6% to $101,300 as markets absorbed both the expected rate cut and a shockingly hawkish 2025 projection.
Fed Decision and its Market Impact
Delivering its third consecutive rate drop of the year, the Federal Reserve lowered the benchmark federal funds rate by 25 basis points to the 4.25%-4.50% range. Although the rate decrease itself matched market expectations, Fed Chair Jerome Powell’s later remarks and updated estimates set off a more general market selloff.
Powell disclosed that compared to past estimates, the Fed now projects just two further rate cuts in 2025, a notable decrease. The central bank also changed its 2025 inflation projection from 2.1% to 2.5%, implying a more wary attitude to monetary easing than markets had priced in.
The reaction of the crypto market to the Fed’s choice went beyond Bitcoin BTC/USD; Ethereum ETH/USD dropped 5.96% to $3,600. Other main cryptocurrencies had even more sharp falls; XRP/USD, Cardano ADA/USD, and Litecoin LTC/USD all recorded losses above 10%.
BTC/USD Technical Analysis
Skew, a crypto analyst, claims that the price decline cleared market positioning “in both ways,” with shorts taking gains as long positions were closed. The analyst observed that Bitcoin gained support in the $98,000-$100,000 zone, pointing out the $100,000-$101,400 range as a crucial level for bulls to recover before the daily closing.
Strategic Bitcoin Reserve: Political Implications
The possible policies of the Trump administration complicate the market prediction. Powell specifically said that under the Federal Reserve Act the Federal Reserve “is not allowed to own bitcoin” and that legislative amendments are not sought to enable such holdings in response to rumors regarding a government Strategic Bitcoin Reserve.
Expert Opinion
European Head of Research at Bitwise Andre Dragosch underlined continuous worries over worsening financial conditions despite rate cuts: “The biggest headache for the Fed right now is the fact that financial conditions have still tightened despite the Fed cutting rates.” Dragosch underlined that diminishing Fed net liquidity and dollar appreciation create serious hazards to the price movement of Bitcoin.
Crypto Market Correction Ahead?
BitMEX co-founder Arthur Hayes sent a sobering warning regarding possible market instability around Trump’s inauguration in January 2025. Given political limitations, Hayes contends that market expectations for quick pro-crypto policy execution may be unreasonable and that disappointment could set off a substantial market downturn.
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