Bitcoin tumbles to $111K after Fed’s rate cut: $179M in leveraged long positions liquidated
Bitcoin experienced a sharp decline to $111,000 following the U.S. Federal Reserve’s first interest rate reduction since 2023, erasing earlier gains and triggering a wave of liquidations in the crypto derivatives market. The sudden move wiped out over $179 million in long positions, as traders misinterpreted the Fed’s dovish stance as a green light for risk assets.
On Wednesday, the Federal Open Market Committee (FOMC) announced a 25-basis-point rate cut, bringing the federal funds target range down to 3.75%–4.00%. While the initial market reaction was positive, sentiment swiftly turned after Fed Chair Jerome Powell’s press conference. Powell emphasized a cautious approach, stating that the central bank is not committed to a defined path of further easing. This tempered expectations of a sustained dovish shift and introduced uncertainty into the broader financial markets.
The impact was immediate in the crypto sector. According to data from Coinglass, more than $179 million in long positions were liquidated across major exchanges, with Bybit and Hyperliquid leading the tally. Over 80% of the liquidated positions were longs, underscoring the overly optimistic sentiment that had built up ahead of the Fed’s announcement.
Bitcoin’s price reacted violently to the shift in tone. After briefly testing higher levels, BTC plunged to $111,000, where it found temporary support. Technical analysis now places short-term support near $109,000, with resistance forming at around $117,500. A sustained breakdown below $109,000 could lead to an extended sell-off, potentially targeting the $103,500 region — an area that has historically served as a bounce zone since mid-September.
Fibonacci retracement levels provide further insight into the current price structure. The 0.618 Fibonacci level sits near $117,594, acting as a significant resistance point for any bullish recovery. The RSI (Relative Strength Index) currently hovers in a neutral zone, indicating a phase of consolidation rather than a clear reversal or continuation of the downtrend.
Despite the pullback, macroeconomic shifts suggest a more favorable liquidity environment in the near term. The Fed’s decision to conclude its quantitative tightening (QT) program by December, combined with the rate cut, could increase liquidity across financial markets. Historically, such environments have provided a tailwind for risk assets like cryptocurrencies — assuming volatility subsides.
In the immediate term, Bitcoin’s price trajectory remains closely tied to evolving macroeconomic conditions. If Powell maintains his balanced stance — easing without overcommitting — BTC is likely to remain confined within a defined trading range of $109,000–$117,500. However, any fresh catalyst, such as renewed institutional inflows through ETFs or weaker-than-expected U.S. economic data, could trigger a breakout toward the $126,000 resistance zone.
Market participants are now reassessing their positions, reducing leverage, and waiting for stronger confirmation that the Fed’s policy shift will translate into sustained risk appetite. This cautious approach reflects broader uncertainty, as traders weigh the potential for both economic softening and a more accommodative monetary environment.
In addition to the immediate price movements, the broader implications of the Fed’s pivot are also drawing attention. A looser monetary stance typically supports higher asset prices, but only if accompanied by stable inflation and employment data. If inflation begins to rise again or the labor market shows unexpected strength, the Fed may be forced to pause or even reverse its easing cycle — a development that could undermine bullish momentum in crypto markets.
Furthermore, geopolitical risks and regulatory developments continue to exert influence. Increased scrutiny from U.S. regulators or macro shocks, such as escalating global tensions or supply chain disruptions, could add layers of complexity to an already fragile market structure.
Institutional investors are also watching closely. The behavior of large holders, often referred to as “whales,” tends to shift during periods of uncertainty. On-chain data suggests that some large wallets have begun rotating into stablecoins or reducing exposure, signaling a defensive posture. Conversely, long-term holders appear to be unfazed, continuing to accumulate during dips — a pattern consistent with previous accumulation phases ahead of broader market recoveries.
Looking ahead, all eyes are on upcoming U.S. economic data releases, including inflation indicators and jobs reports. These figures will play a crucial role in shaping expectations around future Fed policy moves. If data supports the case for further easing without stoking inflation fears, Bitcoin and other cryptocurrencies could resume their upward trajectory.
Ultimately, while the recent drop to $111,000 has rattled short-term traders and triggered widespread liquidations, the longer-term outlook for Bitcoin remains intertwined with macroeconomic dynamics. As the dust settles, the market may find renewed direction — either from continued policy shifts, investor sentiment changes, or technical breakouts from the current consolidation range.