Bitcoin recovery stalls after Fed holds interest rates, citing ‘uncertainty’ in Middle East

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FOMC minutes with new statements in red. Source: CNBC The Fed’s hold on rates aligned with market expectations, but Bitcoin remained fragile throughout Chairman Powell’s presser. Hyblock CEO Shubh Varma described the price action as “the usual sell the news reaction after the FOMC,” but also noted that BTC “quickly recovered to pre-announcement levels within hours, showing strong underlying conviction.” Adding data to back his market view, Varma said, “The global bid ask ratio spiked to 0.3 (one of the highest readings), while open interest fell on the price drop. This is classic post-FOMC position squaring and stop-hunt behavior rather than conviction selling.” BTC/USDT global bid ask ratio. Source: Hyblock After the FOMC minutes were published, BTC dropped to an intra-day low of $74,937, slightly below the 20-day simple moving average ($75,664) that some traders identified as critical to confirming BTC’s support-resistance flip. As reported on Monday by Cointelegraph, following the break above the channel resistance on the daily chart, BTC required consecutive daily candle closes above the trendline, followed by a lower support restest in the $76,500 to $75,500 range. BTC/USDT 1-day chart. Source: TradingView While all the above have happened, failure to recapture the 20-MA and close above the trendline resistance could be interpreted as a loss of momentum within the bull trend, opening the path for Bitcoin to test the downside boundary of the near-4-month-old channel. Prior to the Chairman Powell’s presser, Glassnode analysts noticed that Bitcoin traders were adding bearish leverage, citing rising open interest after Tuesday’s rally to $79,000, funding remaining neutral and a divergence between the spot and futures market cumulative volume delta (CVD). Bitcoin traders turn bearish ahead of FOMC minutes. Source: Glassnode / X Additional analysis from Glassnode’s The Week Onchain report depicted Bitcoin’s price action as “trapped below market mean," where $65,000 to $70,000 act as support, but weak demand prevents the formation of sustainable rallies. According to the report, Bitcoin failed to overcome its True Market Mean at $79,000 and a surge in short-term holders' profit taking, along with margin futures flipping net short, has sapped away Bitcoin’s shorter-term bullish momentum. BTC entity-adjusted short-term holder realized profit. Source: Glassnode While these factors increase Bitcoin’s sensitivity to a sharper downside move, the analysts said institutional flows into the spot BTC ETFs and rising CME open interest have helped to build a “dense accumulation cluster between $65K and $70K.” CME open interest, US spot ETF AUM position change. Source: Glassnode

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