Bitcoin price falls by 4.6% post Federal Reserve rate decision and forecast | Market Watch

Bitcoin and the broader crypto market took a hit following the Federal Reserve’s decision to cut its benchmark policy rate by 25 basis points. While many traders expected the rate cut, the market responded with a 4.6% drop in Bitcoin’s price to $101,300 and a 5.96% decline in Ether to $3,600 after Fed Chair Jerome Powell hinted at fewer rate cuts in 2025 than previously predicted.

Powell’s statements about only two rate cuts in 2025 and a higher inflation forecast of 2.5% for the same year sparked concerns among investors. This adjustment in the Fed’s inflation outlook led to a more cautious atmosphere in the market, with some traders interpreting it as a signal of a more stringent approach by the central bank, especially considering potential policy changes under the new administration.

Analysts specializing in cryptocurrencies observed that Bitcoin’s price drop resulted in the clearing of both long and short positions, causing BTC to fall into a bid zone ranging from $100,000 to $98,000. To regain positive momentum, Bitcoin needs to reclaim the $100,000 to $101,400 zone before the daily candlestick closes. This recovery is crucial for restoring confidence in the market.