Bitcoin is hovering around $113,000, as cryptocurrency markets hold their breath as they watch the key Federal Open Market Committee (FOMC) meeting. Key decisions are likely to be announced today at 8:00 PM Warsaw time.
Federal Reserve (Fed) officials are expected to lower their interest rate target range by 25 basis points, moving it to a range of 4.00–4.25%, which historically tends to support risk assets like cryptocurrencies. Despite this, Bitcoin, the world's largest cryptocurrency, saw a slight decline of 0.7% over the past 24 hours, though it is still up 4.5% week-on-week. Other major tokens, such as Ethereum, are seeing similar modest losses, with a 1.4% decline.  to around $4,028, as well as Solana and Binance Coin, each losing around 2%. On the other hand, the XRP token remains slightly higher, continuing its strong weekly rally as investors rotate into high-volume assets.
Macroeconomics dictates the terms, and liquidity declines
Thomas Perfumo, global economist at the Kraken exchange, emphasizes that the volatile macroeconomic situation is currently the dominant driver of the entire cryptocurrency cycle. Perfumo believes a 25 basis point cut is highly probable and is already largely factored into current market prices, with the market predicting another reduction by December. However, the expert notes, the sharp sell-off on October 10th served as a reminder of how vulnerable cryptocurrencies and risk assets remain to external shocks. The balance between institutional inflows and demand for government bonds has shifted, dampening short-term momentum, even as long-term capital remains stable.  Perfumo notes that while demand from digital asset vaults like MicroStrategy is slowing, flows into ETFs remain bullish, reflecting the growing importance of cryptocurrencies in traditional finance.
🐳 Whales are setting themselves up for a trap, and analysts are warning
A worrying factor behind the Fed's decision is dwindling liquidity on centralized exchanges, which has fallen to around 40% of pre-October levels, according to Alice Li, partner at Foresight Ventures. Li adds that early signs of renewed stress among US regional banks could force the Fed to halt quantitative easing (QT) early, although inflation risks still prompt policymakers to remain cautious.
Analysis from X Platform indicates that whales (large investors) are increasing their exposure to long BTC positions, anticipating a post-FOMC rally. AlphaBTC's Mark Cullen warns of the risk of a short squeeze (a sharp price increase forcing the closing of short positions), pointing to a short squeeze trap above $115,000, just below the $117,000-$120,000 resistance zone.
Ran Neuner, in turn, points to the CME gap at $111,000, which is historically often filled by corrections before larger breakouts.
Despite concerns, FxPro analyst Alex Kuptsikevich maintains that Bitcoin's technical framework remains constructive, as the price remains above its 50-day and 200-day moving averages, and the rebound from the support level at $108,000 maintains a bullish structure. The total cryptocurrency market capitalization remains at around $3.9 trillion, comfortably above key moving averages.
At the same time, analysts at 10x Research and CryptoQuant suggest that October 2025 could be the last window of opportunity for profits before a potential bearish entry on the market cycle chart, with a market bottom expected around October 2026. While sentiment remains fragile and liquidity is dwindling, an increase in volatility is almost certain around Wednesday's Fed announcement, especially if Jerome Powell's tone signals a slower easing of policy.
$BTC  #BTC #Write2Earn #WallStreetNews #Fed #SEC