Fed’s Aggressive Stance Triggers Bitcoin Decline, Challenging $100K Support as Market Indicators Remain Unclear

On September 17, 2025, the U.S. Federal Reserve’s decision to lower interest rates by 25 basis points sparked a rapid decline in

, causing its value to drop by 4.6% to $101,300 shortly after the announcement. The move, along with a new 2025 inflation estimate of 2.5% and a projection of only two more rate cuts, unsettled the crypto sector. Ether (ETH) also slid 5.96% to $3,600, and the broader market followed suit. Market experts linked the downturn to the Fed’s cautious messaging, which indicated a restrained approach to monetary easing despite the rate cut title2 [ 2 ].

Bitcoin’s trading behavior showed conflicting trends. Many long positions were liquidated while short sellers took profits, yet blockchain data revealed that major investors were accumulating. Wallets with holdings between 10 and 10,000 BTC increased their balances by 56,372 coins since late August, pointing to institutional faith in Bitcoin’s future title6 [ 6 ]. At the same time, retail traders became more eager to “buy the dip,” though analytics firm Santiment cautioned that such optimism often precedes further declines. Historically, markets tend to reach a bottom only after retail enthusiasm fades, which has not yet occurred title6 [ 6 ].

The Fed’s policy adjustment also affected broader investment flows. Bitcoin ETFs continued to see net inflows, with total assets under management climbing to $57 billion since launch. BlackRock’s IBIT alone now manages $87 billion, highlighting strong institutional interest title3 [ 3 ]. However, David Kelly of JPMorgan warned about the possibility of a “sell-the-news” reaction, where optimism before the announcement reverses after the fact. Furthermore, the market’s forward curve indicated that most rate cuts were already anticipated, raising doubts about the potential for further upward momentum title3 [ 3 ].

Technical indicators pointed to Bitcoin’s fragile state. The price tested key support between $100,000 and $101,400, and failing to recover this range could trigger a deeper pullback. Bearish signals, such as negative divergences in the MACD and RSI and a rising wedge pattern on the weekly chart, suggested a possible retreat to $100,000. On the other hand, if Bitcoin manages to stay above $117,900, it could regain bullish strength and aim for new record highs title5 [ 5 ].

Opinions among investors remained divided. While previous Fed easing cycles have generally benefited riskier assets like Bitcoin, the current landscape presents distinct challenges. Although a weaker U.S. dollar usually favors cryptocurrencies, ongoing geopolitical tensions and inflationary effects from tariffs imposed during the Trump administration have dampened this support. Santiment observed that Bitcoin’s 30-day MVRV ratio had fallen below zero, meaning recent buyers were at a loss—historically a sign that accumulation could be underway title6 [ 6 ]. Still, analysts urged caution, stressing that the recent correction in September does not rule out the possibility of further declines before a lasting recovery emerges title7 [ 7 ].