Bitcoin News Today: Bitcoin Dips Below $88K as Fed Cautiousness Spurs Crypto Selloff

Bitcoin's price dipped below $88,000 as traders and analysts attributed the drop to FOMC nerves, with market participants bracing for potential volatility following the Fed's policy announcement. The move has sparked speculation about whether the Fed's decision will lead to a bullish rebound or a deeper correction in the cryptocurrency market. With the Fed signaling a cautious approach to rate cuts, the crypto market remains in a state of flux, waiting for directional clarity.

The recent price action has been closely watched by crypto analysts, many of whom believe the Fed's decision will be a critical turning point for Bitcoin and other major cryptocurrencies. Some traders are optimistic that Bitcoin could rebound above $93,700 if the Fed proceeds with a rate cut, potentially setting the stage for a move toward $100,000. However, others warn that a lack of decisive action from the Fed could send Bitcoin below $87,500, leading to a period of consolidation.

Ethereum, meanwhile, has also experienced significant downside, sliding below $3,200 following the Fed's cautious rate cut. The drop has triggered liquidations across the crypto market, with Bitcoin and Ethereum both facing strong selling pressure after the Fed's announcement. The broader crypto market has seen a sharp pullback, with traders reassessing risk appetite in light of the Fed's decision.

The Fed's rate cut and Chair Jerome Powell's comments have led to increased caution in the crypto market, with Bitcoin dipping below $90,000 and Ethereum sliding by 4%. The Fed's cautious tone-highlighting downside risks to the labor market and elevated inflation- has sparked a wave of selling. Bitcoin and Ethereum faced heavy liquidations, with Coinglass data showing $440.2 million in long liquidations over the past 12 hours.

The broader crypto market responded with a drop in value to $3.07 trillion, down 2.25% from the previous day. While traditional equity markets rallied on the Fed's rate cut, cryptocurrencies continued to trade in the red, highlighting a growing disconnect between crypto and traditional asset classes. Around 90% of the crypto market was in negative territory, with some top-10 tokens experiencing double-digit losses.

Bitcoin's price action continues to reflect a bearish trend, with technical indicators like the exponential moving averages (EMAs) and relative strength index (RSI) reinforcing the downtrend. The RSI for Bitcoin is at 44.23, indicating more selling pressure than buying, and the ADX at 28.15 confirms a strong bearish momentum. Despite the short-term weakness, prediction markets on Myriad show strong bullish sentiment, with 69% of traders still betting that Bitcoin will reach $100K before dropping to $69K.

Ethereum's technical outlook is similarly bearish, with the RSI at 51.24-technically neutral but indicating a lack of decisive momentum for either bulls or bears. However, Ethereum has outperformed Bitcoin in recent weeks, gaining 3.6% compared to Bitcoin's 1% increase. This has led to a slight shift in sentiment on Myriad, with predictors now slightly bullish on Ethereum's potential to rise above $3,140.

The crypto market faces several risks as it navigates the Fed's cautious rate cut strategy. First, if the Fed hesitates or delays additional rate cuts, Bitcoin could fall below key support levels like $87,500, triggering a period of consolidation. This would shift the technical outlook for Bitcoin toward a more defensive stance, with bears gaining the upper hand. For Ethereum, a failure to break above the $3,200 level could lead to further losses as bulls struggle to gain control of the price action.

On the other hand, if Bitcoin manages to stabilize above $86,000 and breaks above $93,700, it could signal a resumption of the bullish trend, with traders eyeing a move toward $100,000. The same applies to Ethereum, where a clean break above the 200-day EMA and sustained momentum could indicate a shift in sentiment toward the upside. However, given the current bearish trendlines and EMAs, analysts warn that any rally is likely to be met with resistance before a broader bullish case can be confirmed.

For investors, the coming weeks will be critical as they monitor the Fed's policy path and the broader market reaction. Bitcoin's ability to hold key support levels like $86,000 and $87,500 will be a key focus for traders, with a breakdown below these levels signaling a deeper correction. Ethereum traders are also watching closely, particularly as the token approaches the $3,200 level, which could determine whether bulls regain control.

Prediction markets like Myriad and Kalshi offer further insights, with Bitcoin's odds of hitting $100,000 rising to 51% as traders anticipate a potential rate cut. Ethereum's odds have also improved slightly, with predictors now favoring an upward move to $4,000 over a decline to $2,500. These shifts in sentiment reflect the market's growing confidence in a potential rebound, though traders remain cautious given the ongoing bearish technical setup.