The 25 basis point cut marks the first time the US Federal Reserve has reduced its policy rate since December 2024.
Fed Cut sends over $116K bitcoin, but not long
Wednesday’s interest rate cuts by the US Federal Reserve, just minutes before the announcement, CME Group’s FEDWATCH tool showed a 96% chance of a 25-base point cut and a 4% chance of a 50-base point cut. However, the market wanted to see the real thing, but many said the cut was already priced, but Bitcoin (BTC) still retreated to $115K after recovering $116,000.
(Most experts were already hoping for a 25bps cut just minutes before official interest rate cuts were announced on Wednesday afternoon/cmegroup.com)
A lower policy rate has emerged than last week after employment data surprised economists with a record surge in new unemployment claims. Trump candidate Stephen Milan was then confirmed yesterday as one of the seven-member boards of the Federal Reserve, increasing the likelihood of today’s cut. Milan attended a central bank meeting and was the only member of the committee seeking a 50-standard reduction.
But even if the first interest rate cuts are confirmed in almost a year, BTC is still stomping on the water in the $1.15 million to $116,000 range. Many are hoping for further cuts by the Fed when they are reconvened in October and December later this year. This could be the last shot at the last 2025 BTC rally.
“The committee is paying attention to the double mission of rising negatives on employment and the risks to both sides of judges,” the Fed said in a press release Wednesday. “In support of that goal and in light of changing risk balance, the committee has decided to reduce the target range for federal funding rates by 1/4 percentage points to 4-4.25%.”
US President Donald Trump, visiting the UK, did not respond to the cuts immediately. The president even plundered Fed Chairman Jerome Powell for not lowering interest rates and even attempted to fire Biden-era appointee Governor Lisa Cook on allegations of mortgage fraud. Another Biden-appointed former Fed governor Adriana Kugler has mysteriously left the drama.
Market Metric Overview
Bitcoin had fallen by about 1.00% in 24 hours at the time of writing, despite interest rate cuts, according to CoinmarketCap data. Cryptocurrency prices are trading between $114,803.05 and $117,328.61 starting Tuesday.
(Bitcoin Price/Trading View)
The 24-hour trading volume rose 8.02% to $49.45 billion, but the market capitalization was just 0.95% retreat, as prices fell to $2.3 trillion. Bitcoin’s advantage initially stagnated for most of the day, but ultimately fell 0.37% to 58.09%.
(Bitcoin control/trade view)
According to Coinglass data, total Bitcoin futures have soaked 0.71% since yesterday to $83.07 billion. Bitcoin liquidation in the last 24 hours totaled $25.39 million. The long liquidation of $14.51 million accounted for the majority of that total, with the remaining $10.88 million being made up of shorts.
