Bitcoin retreats to $111,000 after Fed rate cut, wiping out $179M in long positions
Bitcoin experienced a sharp decline to $111,000 following the U.S. Federal Reserve’s decision to implement its first interest rate cut since 2023. The market initially reacted with optimism to the 25-basis-point reduction, which brought the federal funds target range down to 3.75%–4.00%. However, that sentiment quickly shifted after Fed Chair Jerome Powell adopted a cautious tone during his post-announcement remarks, stating that the central bank was not committed to a fixed trajectory for further rate reductions.
The abrupt reversal in market mood triggered a wave of liquidations, with over $179 million in long positions wiped out across major crypto exchanges. Data from Coinglass shows that more than 80% of total liquidations were long positions, reflecting the overly bullish expectations of traders who anticipated a more aggressive policy pivot. Bybit and Hyperliquid were among the platforms seeing the highest volume of liquidations, suggesting that leveraged traders were caught off guard by the Fed’s tempered approach.
Technically, Bitcoin now hovers between key support and resistance levels. The immediate support is located around $109,000, while the next major resistance lies near $117,500, based on Fibonacci retracement levels. A break below $109,000 could open the door to further downside, potentially dragging the price toward the $103,500 range — a level that has historically provided a base for recovery since mid-September.
Despite the downturn, the broader liquidity environment appears to be shifting in favor of risk assets. The Fed’s decision to end quantitative tightening (QT) by December and to begin easing policy may eventually create a more accommodating backdrop for cryptocurrencies. However, any sustained uptrend in Bitcoin will likely depend on macroeconomic data and investor sentiment in the coming weeks.
The Relative Strength Index (RSI) currently sits in neutral territory, indicating that Bitcoin is not yet in a confirmed downtrend but is instead consolidating within a defined range. This consolidation phase could persist until clearer signals emerge from the Fed or other macroeconomic indicators.
Analysts believe that if ETF inflows resume or if upcoming U.S. economic data point to weakening growth, Bitcoin could retest the $126,000 resistance zone. However, in the absence of such catalysts, price action is expected to remain range-bound, with traders recalibrating their positions and leverage levels in response to the uncertain policy outlook.
Looking ahead, Bitcoin’s trajectory will likely be influenced by a combination of policy clarity from the Fed, developments in the ETF market, and broader investor appetite for risk. If Powell continues to maintain a careful balance between signaling accommodation and avoiding excessive speculation, BTC may remain locked in its current trading corridor.
In addition, geopolitical developments or unexpected disruptions in traditional financial markets could act as external catalysts that either bolster or undermine Bitcoin’s short-term performance. For instance, a sharp correction in equities or bond markets could push institutional investors toward crypto as a hedge, while signs of economic overheating might lead the Fed to pause or reverse rate cuts, thereby pressuring BTC further.
Institutional interest also remains a critical variable. Though retail traders dominate day-to-day price action, long-term trends are increasingly shaped by large-scale investors and fund flows. A notable uptick in institutional accumulation, particularly if tied to ETF products or custody solutions, could support a more durable rally, even amid macro uncertainty.
Meanwhile, on-chain data reveals a growing divergence between short-term holders and long-term investors. While speculative positions suffered in the recent drop, long-term holders appear to be accumulating, suggesting confidence in Bitcoin’s long-term fundamentals despite short-term volatility.
The options market also reflects this uncertainty. Implied volatility on BTC contracts has risen, indicating that traders are positioning for larger price swings in the near term. However, skew remains relatively balanced, showing that sentiment is not overly bearish despite the recent correction.
Finally, mining data shows stable hash rates and healthy profit margins for miners, even at current price levels. This suggests that the network remains secure and that there is no immediate risk of miner capitulation, which often signals deeper market stress.
In summary, while Bitcoin’s drop to $111,000 and the liquidation of $179 million in long positions mark a sharp market reset, the overall outlook remains cautiously optimistic. The Fed’s move to cut rates and end QT might eventually provide a more supportive environment for digital assets, but investors will need to navigate ongoing volatility and await clearer macro signals before a sustained uptrend can resume.