Bitcoin Dips Below $113K as Fed Decision Hits Market

Bitcoin has slipped below $113k on Wednesday as traders adopted a cautious stance after the Federal Reserve’s critical policy decision came with a 25bps rate cut and markets react sharply to Fed chair Jerome Powell hawkish tone.

At press time, Bitcoin trades at $111,690, down 2.77% over 24 hours but maintaining a 4.82% weekly gain. The leading cryptocurrency sits approximately 10.37% below its all-time high of $126,270 reached on October 6, 2025, with market capitalization at $2.25 trillion.

At today’s Federal Open Market Committee meeting, Jerome Powell confirmed the second rate cut of 2025 by 25bps, reducing the target range to 4.00 %–4.25 %.

The Fed also announced that quantitative tightening (QT) will officially cease on December 1, signifying a major shift toward monetary easing and potential liquidity boost.

However, a clear divide emerged within the committee, Powell noted there are “strongly differing views” on how to proceed in December, and signaled that another rate reduction is “far from sure.”

For the first time in years, the Fed saw dissenting votes, one member opposed the cut, while another pushed for a larger 50-basis-point reduction, a departure from the near-unanimous decisions of recent years.

Markets reacted negatively to the hawkish tone, and crypto assets followed suit: Bitcoin fell sharply, with others like Ethereum and broader altcoins declining in sympathy.

Broader Market Reflects Bitcoin’s Cautious Tone

After the announcement, at time of writing, Ethereum has now fallen, now selling for $3,923.29, Solana trades around $195, and BNB stands at $1,115. Total crypto market capitalization reached $3.9 trillion.

Despite the pullback, Bitcoin maintains its position as the market’s cornerstone asset, dominating by capitalization and institutional trust. Ethereum, with over $400 billion market cap, leads in smart contract and decentralized finance activity, boasting Total Value Locked above $62 billion.

According to DefiLlama, Solana continues thriving in payments and consumer applications, supported by over 3 million daily active wallets and $11.707 billion in TVL. Bitcoin’s on-chain footprint remains comparatively close at roughly $8.117 billion in TVL.

Meanwhile, investor sentiment blends caution with optimism, shaped by macroeconomic and geopolitical developments. Analysts are eyeing upcoming U.S.–China trade talks in South Korea, where Donald Trump and Xi Jinping will discuss tariffs and shipping costs.

Macroeconomic Factors Drive Market Uncertainty

The trade negotiations between the world’s two largest economies carry substantial implications for global risk appetite. Markets are closely monitoring diplomatic signals from both sides ahead of the South Korea summit.

Any breakthrough on tariff reductions or shipping cost agreements could immediately impact cryptocurrency markets, potentially driving risk-on sentiment across digital assets.

Bitcoin’s price action reflects broader uncertainty around monetary policy direction.

The cryptocurrency has historically demonstrated sensitivity to Federal Reserve decisions and interest rate expectations. Previous rate cut cycles have often preceded significant Bitcoin rallies, though the relationship varies based on broader economic conditions.

The current consolidation phase follows Bitcoin’s October rally, which saw the asset surge past six figures for the first time in history.

Technical Analysis : Strong Breakout Above $118K Needed For Bullish Confirmation

Bitcoin currently trades at $111,690, showing a constructive consolidation pattern after rallying to new all-time highs. The asset maintains position above its 50-day moving average at $111,200, confirming bullish market structure.

Immediate resistance stands at $118,000, with major resistance at the recent $126,000 all-time high. Support zones include $111,200, $108,000, and the psychological $100,000 level.

The Relative Strength Index reads 44.67, indicating neutral territory with room for upward movement before reaching overbought conditions. The signal line is moving to cross the MACD line, signaling a potential drop.

Volume analysis shows moderate activity during consolidation, with previous breakouts accompanied by elevated participation. The tight trading range between $110,000 and $118,000 represents healthy profit-taking after the parabolic move.

A breakout above $118,000 with strong volume would likely trigger the next leg higher toward $125,000-$130,000. Loss of support below $108,000 could lead to retracement toward $100,000.

Technical indicators position for potential bullish continuation, with the consolidation pattern suggesting accumulation rather than distribution. The setup favors long exposure with asymmetric risk-reward profile at current levels.