Bitcoin Price Returns to $81K as Federal Reserve Holds Rates Steady
Key Takeaways
Bitcoin surged to $81,687 before retreating below $80,500 as traders awaited the Fed’s rate decision.Coinglass reported $167 million in crypto liquidations, including $110 million in short positions.The Federal Reserve held rates steady at 3.75%-4% after previously raising rates in September.
Bitcoin Briefly Surges Above $81K Ahead of Fed Decision
The price of bitcoin surged past $81,000 on Wednesday as markets awaited the Federal Reserve’s decision on interest rates. However, bitcoin’s return above $81,000 was short-lived, as the price later tumbled below $80,500—the same level it held 24 hours earlier. The volatile price movement came as economists and analysts predicted the Federal Open Market Committee (FOMC) would keep interest rates unchanged.
Hours before the FOMC decision, market consensus pointed to roughly a 90% probability that the Fed would maintain its benchmark rate in the 3.75%-to-4.00% range, according to CME Group’s Fedwatch tool. Analysts noted that while persistent inflation continues to support future rate increases, policymakers are widely expected to pause ahead of the upcoming U.S. midterm elections.
Before reclaiming $81,000, bitcoin faced rejection at $80,500 Tuesday afternoon before trending upward to $80,700. A sudden rally then propelled the cryptocurrency to $81,136. However, around 5:35 p.m. ET, bitcoin began a downward slide to just above $80,500, followed by a relief rally that nearly erased all losses by midnight.
In the early hours of Wednesday, bitcoin rallied again, surging to an intraday peak of $81,687 before briefly consolidating around $81,500. Hopes that bitcoin would break out of its $80,000-to-$82,000 range were quickly dashed as the price plunged below $80,400.
Federal Reserve Holds Rates Steady
At 2 p.m. ET, the Federal Reserve announced that it indeed held rates steady, as widely expected. Bitcoin traded near $81,000 in the minutes following the announcement, trading up about 0.5% over the last 24 hours.
The sharp price fluctuations over the last 24 hours triggered a surge in liquidated leveraged positions across derivative markets. On-chain analytics firm Glassnode noted that the rapid price swings squeezed overleveraged market participants across key liquidity clusters.
Data from Coinglass confirmed the impact, showing bitcoin liquidations nearly reached $58 million on Wednesday, with liquidated short positions accounting for more than $46 million of that tally. Across the broader cryptocurrency market, total liquidations topped $167 million, with short bets making up approximately $110 million of the total.
