Bitcoin price tanks ahead of FOMC meeting today, TRUMP, PI buck market

Bitcoin dropped ahead of the Federal Reserve meeting due later today, as traders switched to a wait-and-watch mode.

The total crypto market fell over 2% to $3.88 trillion, with the crypto fear and greed index showing no improvement from the previous day, holding steady at a neutral 51, even as several bullish catalysts had lined up.

Altcoins bled through most of the day as risk-on sentiment vanished from the market, except for a select few low-cap tokens that managed to lock in profits.

Why is Bitcoin price down today?

Bitcoin lost its footing above $115,000 today amid macro caution, which followed a wave of selling pressure that pushed prices toward intraday lows around $112,000.

Even with catalysts like a likely rate cut, renewed diplomatic signalling between Washington and Beijing, and the approval of Solana, Hedera, and Litecoin ETFs, the market failed to hold its ground.

The most logical explanation for the current price action is that traders are treating this as a classic sell-the-news event. 

Markets had already priced in the approval of additional ETFs for assets like XRP, Dogecoin, Chainlink, and Avalanche, while betting heavily on a favourable outcome from both the Fed decision and the Trump-Xi meeting.

On Polymarket, odds of a Fed cut have jumped to 98%, and traders are widely anticipating progress on trade negotiations between the United States and China.

With expectations already this high, the actual events may no longer offer any surprise edge, leading to an unwind of bullish positions that had built up ahead of time.

In the meantime, the derivatives market is showing signs of stress as traders reduce exposure ahead of key events. 

Over the past 24 hours, total liquidations have topped $470 million, with Bitcoin alone accounting for $98 million in wiped-out positions.

The bulk of these were long trades, as nearly $333 million in bullish bets were forcefully closed.

Among altcoins, Ethereum followed with $141 million in liquidations, while Solana saw around $54 million flushed out.

In total, more than 133,000 traders were liquidated across major exchanges, with the largest single position worth $6 million taken out on an ETH-USD pair at Hyperliquid.

The rapid drop in leverage across majors points to a broader deleveraging cycle as traders prepare for clarity from the Fed. 

Until then, risk sentiment is likely to remain fragile, especially with much of the expected good news already priced in.

Will Bitcoin price go up after FOMC meeting?

Currently, all eyes are fixed on the conclusion of the upcoming FOMC meeting, after which Chairman Jerome Powell will deliver his remarks on the Fed’s policy path.

Markets have already priced in a 25 basis point cut, so attention will now shift to any signals about what comes next, particularly whether the chances of another rate cut in December remain on the table. 

If Powell leaves the door open, Bitcoin and the broader crypto market could benefit from renewed risk appetite.

Still, some traders believe the meeting may pass without much impact.

In a note published earlier today, trading resource QCP Capital described the FOMC as a likely non-event, with Powell expected to stick close to the script. 

“The Fed is set to deliver a 25 basis point cut, consistent with its September dot plot, and Powell is unlikely to offer new forward guidance,” it wrote in its market update.

The note also pointed out that the recent government shutdown has created a data vacuum, leaving the Fed with limited visibility on inflation and labour trends. 

“The absence of official data leaves the Fed effectively flying blind. Without inflation or employment prints, any policy recalibration would be premature,” QCP explained.

On the technical side, Bitcoin remains under pressure and is in the middle of what looks like a volatile retest, according to trader and analyst Rekt Capital. 

The analyst flagged the 21-week exponential moving average as a key support level, currently sitting near $111,000.

“Bitcoin just needs to weekly close above $114,500 to confirm a successful retest,” he said in a post alongside the weekly chart.