The price of Bitcoin took a significant dip today, influenced by remarks from Federal Reserve Chair Jerome Powell. This decline in Bitcoin sentiment was mirrored in the prediction market Myriad, where bearish sentiment gained traction. While technical indicators suggest a lack of momentum in the short term, the broader bullish trend appears to remain intact.
Today, Bitcoin’s value plummeted to as low as $110,000, marking a 3% decline after Powell indicated that a rate cut in December was not guaranteed. His comments followed the Federal Reserve’s announcement of a 0.25% rate cut on Wednesday, which adjusted the federal funds target range to 3.75%-4.00%. Instead of prompting a rally in Bitcoin and other cryptocurrencies, these remarks led to a decline across the board.
Simultaneously, sentiment on the Myriad prediction market, developed by Dastan, the parent company of Decrypt, also experienced a sharp decline, dropping nearly 20%. The likelihood of Bitcoin rising to $120,000 decreased from 75% to just 58%, indicating that traders are becoming less optimistic about Bitcoin’s short-term prospects.
Analysts had anticipated the Fed’s rate cut and believed it shouldn’t have immediate repercussions on prices. Therefore, the sell-off is more likely attributed to the common “sell the news” reaction or Powell’s unexpectedly hawkish remarks—or a blend of both. With the Fed’s decision now behind us, attention shifts to whether Bitcoin can maintain crucial support levels or if the market is poised to test the $100K mark.
Interestingly, institutional investment continues to flow into Bitcoin. On October 28, Bitcoin ETFs recorded net inflows of $202.48 million, bringing the total net inflow to $62.3 billion. This influx indicates strong confidence in Bitcoin, even as short-term traders exit and prediction markets reflect a less bullish outlook.
Bitcoin (BTC) Price: Weak Hands Confirmed
The recent sell-off following the Fed’s announcement indicates that Bitcoin faces challenges in the near term. The cryptocurrency opened today at $112,925 but quickly dropped to a low of $109,265 before the Fed’s announcement. The subsequent decline to $111,700 demonstrates that sellers are firmly in control.
Currently, Bitcoin’s Relative Strength Index (RSI) stands at 44.87 on the daily chart. The RSI indicates whether an asset is overbought or oversold, with values above 70 suggesting overbought conditions and below 30 indicating oversold conditions. This reading places Bitcoin in a neutral space, hinting at a slight bearish tendency. However, holders are not in a state of panic, and this does not necessarily indicate a downward trend.
In fact, the situation appears even more precarious on shorter timeframes. The four-hour chart shows an RSI of just 36.38, approaching oversold territory, indicating that selling pressure is increasing. Traders will likely keep an eye on upcoming candlesticks for signs of a potential rebound back to the upward channel that has been in play since mid-October.
On daily charts, the Average Directional Index (ADX) is currently at 17.29. The ADX measures trend strength, with readings above 25 indicating a confirmed trend. Even on the four-hour chart, Bitcoin’s ADX only hits 24.22, suggesting growing indecision in the market. Traders may interpret this as movement lacking in conviction.
The Exponential Moving Averages (EMAs) present a mixed picture. EMAs help traders identify price supports and resistances by averaging an asset’s price over different time frames. On the daily chart, the 50-day EMA remains above the 200-day EMA, signaling that the longer-term uptrend is still in place. This is the primary bullish indicator keeping hope alive. However, the four-hour chart shows the 50-period EMA crossing below the 200-period EMA, resulting in a bearish “death cross,” hinting that short-term momentum has shifted downwards. Still, the possibility of a golden cross forming in the four-hour candlesticks offers some traders hope for Bitcoin to potentially return to its bullish channel by the end of the month.
Why the Rate Cut Didn’t Matter
In market dynamics, outcomes often depend on relative expectations rather than just the events themselves. The Federal Reserve’s 0.25% rate cut was widely anticipated, with a 97% certainty according to the CME FedWatch Tool, which analyzes futures trading data to gauge market sentiment. When an event is so highly expected, it lacks the potential to ignite a rally, as those willing to buy have likely already done so.
Historically, lower interest rates have spurred bullish activity in cryptocurrencies by lowering borrowing costs and driving investors toward riskier assets. However, this effect is gradual and can take time to manifest. In the immediate aftermath of the announcement, we are witnessing profit-taking by traders who positioned themselves ahead of the news, along with lower conviction traders rattled by Powell’s unexpected comments.
A surprise rate cut of 0.50% (which Federal Reserve Governor Stephen Miran supported but was outvoted) or extremely dovish guidance from Powell could have triggered a rally. Unfortunately, neither of these scenarios occurred, leading to a selloff that holds more significant implications beyond just the Fed’s response.
Just yesterday, technical analysis indicated that Bitcoin was likely to close October above the $114,200 monthly open level, which would have sustained the positive “Uptober” trend. Bitcoin was trading at $115,542 with bullish momentum indicators (ADX at 32, RSI at 69, bullish squeeze firing), and prediction markets suggested a 70% chance of continued upward movement. However, this narrative has faced a significant setback. With Bitcoin currently at $111,700—2.2% below the monthly open—October is set to close in the red unless a dramatic reversal occurs within the next 48 hours. The promise of an “Uptober” has effectively vanished.
What Happens Next
With the Fed’s decision now behind us, the focus shifts back to price action. Bitcoin is at a crucial crossroads, and the coming days will likely decide whether it heads to $100K or reclaims its trajectory toward $120K. The bearish scenario is clear: Technical indicators are weak, prediction markets have shifted dramatically, momentum has dissipated, and the “sell the news” strategy is in play. The $110,000-$111,000 range is currently providing temporary support, but if that level breaks, the path of least resistance could lead down to $106,000-$108,000, where the 200-day EMA offers stronger support.
On the bullish side, Bitcoin must reclaim $112,500 and maintain it as support. From that point, a surge past $114,000 with increasing volume could invalidate the bearish outlook and pave the way towards the $117,000-$120,000 mark. For traders, the situation is fairly straightforward: Until Bitcoin can recover to $112,500 and demonstrate some genuine momentum (with an ADX above 25 being a good start), the prevailing path of least resistance appears to be downward.
Key Levels to Watch
Key Resistance: $113,000 (vital to reclaim to invalidate bearish setup), Target Resistance: $114,500, Support: $108,000 (200-day EMA zone, robust support), Strong Support: $100,000 (psychological level and prediction market target).
Disclaimer
The insights and opinions presented in this article are for informational purposes only and do not constitute financial, investment, or other types of advice.
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