Bitcoin Drops Below $91,000 as Fed’s Hawkish Tone Dampens Market Sentiment
Bitcoin Retreats After Brief Surge Above $94,000
Bitcoin slipped below $91,000 on Thursday after a volatile trading week that saw the cryptocurrency briefly jump above $94,000. The asset is currently trading around $90,154, marking a roughly 3% decline as investors reassess risk in response to shifting macroeconomic expectations.
The pullback follows heightened enthusiasm earlier in the week, driven by strong buying momentum and improved liquidity. However, Bitcoin’s rally was short-lived once markets absorbed the latest policy signals from the U.S. Federal Reserve.
Fed Cuts Rates by 25 bps but Signals Ongoing Inflation Concerns
The Federal Reserve announced a 25-basis-point interest rate cut a move widely expected by analysts. However, instead of sparking a sustained risk-asset rally, the decision was overshadowed by the Fed’s cautious tone regarding future inflation risks.
Officials indicated that while interest rates may move gradually lower, they remain wary of sticky inflation and are not committing to a rapid easing cycle. This hawkish backdrop immediately weighed on investor sentiment, prompting traders to scale back exposure to speculative assets such as cryptocurrencies.
Profit-Taking and Macro Sensitivity Drive Short-Term Volatility
Bitcoin’s decline is consistent with typical post-Fed volatility, as traders reposition portfolios based on updated economic expectations. Many short-term investors took profits following the asset’s climb to the mid-$94,000 range, contributing to downward pressure.
The broader crypto market also saw declines, with major altcoins slipping as risk appetite weakened across global markets. Analysts note that Bitcoin is increasingly moving in correlation with macroeconomic indicators, especially interest rate expectations and inflation trends.
Key Levels to Watch: $90,000 Support and ETF Flow Trends
As Bitcoin hovers just above the psychological $90,000 support zone, traders are closely watching liquidity at this level. A decisive break below could open the door to further downside, while a strong rebound may signal renewed momentum.
ETF inflows and outflows remain a major driver of institutional participation, and upcoming economic data particularly inflation reports may influence both Federal Reserve policy expectations and Bitcoin’s short-term trajectory.
Consolidation Likely as Markets Await Clearer Signals
Despite the recent pullback, long-term sentiment in the crypto market remains cautiously optimistic. Many analysts view the current volatility as part of a normal consolidation phase after extended gains.
However, Bitcoin’s near-term direction will largely depend on macroeconomic developments, Federal Reserve commentary, and broader investor confidence. With uncertainty still elevated, markets may remain choppy until clearer signals emerge.
