Federal Reserve Cuts Interest Rates by 25 Basis Points, Bitcoin Price Reacts
The Federal Reserve has announced a 25 basis point cut in its benchmark interest rate, bringing it to a range of 3.75%-4%. This move is the second consecutive rate cut, aiming to support a slowing labor market amidst economic uncertainty. The decision was made despite the ongoing federal government shutdown, which has limited access to crucial economic data.
The rate cut was met with immediate market volatility, with $300 million liquidated from crypto markets within 15 minutes of Fed Chair Jerome Powell’s FOMC speech. However, Bitcoin subsequently recovered to hold above $112,000 as traders digested the implications of the rate cut and the Fed’s announcement to end quantitative tightening on December 1.
Market Reaction and Bitcoin Price Forecast
MicroStrategy Chairman Michael Saylor predicts that Bitcoin will reach $150,000 by year-end, citing the consensus of equity analysts covering the company and the Bitcoin industry. However, analyst Wilberforce Theophilus cautions that markets had already priced in either no cut or a 25-basis-point reduction, and significant rallies would only materialize with unexpected moves of 50-75 basis points or a shift from quantitative tightening to quantitative easing.
VALR CEO Farzam Ehsani characterizes Bitcoin’s recovery above $115,000 as “more than just another relief rally,” citing on-chain data showing whale wallets holding 10,000-100,000 BTC accumulated over 45,000 BTC since the October crash. He notes that the rally has been driven by “measured spot absorption and mild short covering” rather than high-leverage momentum trades.
Technical Analysis and Future Outlook
Bitcoin’s historical pattern around FOMC meetings reveals consistent 6-8% declines following the last three announcements in June, July, and September before recovering to new all-time highs. Technical analysis suggests that the recent structure represents wave (ii) of a larger corrective pattern, with projections anticipating further decline toward the $110,000 region following gap completion, and deeper support zones identified around $104,000-$108,000 if selling pressure intensifies.
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