Fed's Rate Cut and QT End Spark Bitcoin Volatility: BTC Drops Below $111K

The Federal Reserve cut interest rates by 25 basis points as expected, but Bitcoin (BTC) plunged below $111,000 in response to Powell’s comments signaling reduced odds for a December cut, heightening market caution.

Rate Cut and QT Announcement: Mixed Signals

The Fed lowered its benchmark rate to 3.75%-4.00%, the second cut this year, and announced the end of quantitative tightening (QT) on December 1, allowing the balance sheet to stabilize. Powell’s press conference tempered optimism, noting December cut probability at 65%, down from 95.8% pre-meeting, citing economic resilience. This hawkish tilt revived risk aversion, with BTC falling 6% from $116,400 to $109,200 before stabilizing at $111,000.

• Rate Cut: 25 bps to 3.75%-4.00%; second of 2025.
• QT End: December 1; $1 trillion balance sheet normalization.
• Powell Outlook: December cut at 65%; data-dependent easing.

Market Reaction: BTC Dips Amid Broader Caution

BTC’s sell-off reflected volatility, with $113,000 support failing briefly, but $108,918 (50-day EMA) held. Volume surged to $50 billion+, with open interest dropping $10 billion in derivatives. ETH fell 2.1% to $4,016, Solana 3.3% to $194.64, and market cap to $3.8 trillion (-1.4%). Stock futures mixed: Nasdaq up 0.91%, Dow 0.66%, but Euro Stoxx 50 down 0.5%.

On-Chain and Sentiment Insights

On-chain data shows whale outflows easing 51%, but 1,350 whale entities at three-month lows signal hesitation. Fear & Greed Index at 39 reflects caution, with 67% institutional bullishness per Coinbase reports tempered by Powell’s outlook.

2025 Outlook: $130K-$200K BTC Consensus

Analysts forecast BTC at $130K-$200K by year-end. Changelly sees $123,849 in October; CoinDCX $131,500. VanEck targets $180K-$200K on ETF momentum. For investors, how to buy Bitcoin via compliant platforms ensures entry. How to sell Bitcoin and how to cash out Bitcoin offer liquidity. Sell Bitcoin for cash and convert Bitcoin to cash enable fiat conversions.

Trading Strategy: Cautious Recovery Plays

Short-term: Long above $111,000 targeting $115,000, stops at $108,900 (2% risk). Swing: Accumulate dips, staking for 5% APY. Watch $112,000 breakout; below $108,900, exit.

In summary, the Fed’s rate cut and QT end sparked BTC’s $111K drop, but on-chain stability hints at rebound potential for 2025’s evolution.