Bitcoin Price Reacts as US Federal Reserve Cuts Rates by 25 BPS

Bitcoin’s price has declined by more than $2,000 in the last 24 hours. It dropped by some $500 in the past few minutes, and then recovered, right as the US Federal Reserve announced another rate cut – the third one for this year. It reduced the rates by 25 basis points (0.25%), while Powell also confirmed that they forecast one more cut in 2026.

Apparently, the market was expecting a higher decrease of 50 basis points, which didn’t come, resulting in the current choppy price action. That said, the event was largely priced in, as Polymarket odds favoring a rate cut approached 99% hours before the press conference.

The decision comes at a time when the cryptocurrency market is experiencing heightened overall volatility. Just yesterday, BitcoinLinux reported that Bitcoin skyrocketed by about $4,000 in minutes, peaking above $94,600 before retracing.

The move was widely followed within the altcoin market. Notably, ETH increased by 9% over the following 24 hours, outperforming many large-cap cryptocurrencies.

Recall that Coinbase Institutional predicted a rally towards the end of the month. The primary reason is that its “systemic leverage ratio,” which tracks purely speculative positioning, has stabilized at around 4% to 5% of total market capitalization, down from 10% this summer.

In other words, the firm believes that the “speculative excess has been flushed out,” meaning that the market structure, at least in their view, is healthier now.

The post Bitcoin Price Reacts as US Federal Reserve Cuts Rates by 25 BPS appeared first on BitcoinLinux.