Bitcoin Price Slides as Traders Brace for Fed Announcement

Bitcoin has experienced a notable downturn, dropping 3.69% over the past several hours while the wider crypto market edged down by 3.32%. This underperformance highlights mounting pressures on the leading digital asset as it navigates a complex landscape of technical signals and external uncertainties. Traders now face a pivotal moment with the Federal Reserve's announcements looming, adding layers of volatility to an already tense environment.

The decline accelerated after Bitcoin slipped below a crucial support level at $114,000, prompting a wave of automated sell orders that amplified the selling pressure. This breach not only tested investor resolve but also exposed vulnerabilities in the asset's recent upward trajectory. As the price action unfolds, market participants are closely monitoring whether this represents a temporary pullback or the start of a deeper correction.

Examining the Factors Fueling Bitcoins Recent Slide

A closer look at the technical side reveals that Bitcoin has crossed beneath its 50-day simple moving average of $114,278 and its 20-day exponential moving average of $112,347. These key indicators had served as anchors for short-term optimism, but their failure has shifted sentiment toward caution among chart-focused traders. The weekly Bollinger Band midpoint at $113,744 also gave way, paving the way for potential testing of lower supports around the $103,000 to $102,000 range, an area reminiscent of past significant lows.

Analyst's have recently pointed out that Bitcoin's brief surge to $116,000 earlier lacked sufficient trading volume to sustain gains, describing the current move as a possible liquidity grab designed to shake out weaker hands. Such breakdowns often lead to cascading stop-loss executions, where automated systems exacerbate the drop as more positions unwind. For now, a recovery above $113,744 might offer some breathing room, but persistent weakness could draw the price toward the $107,000 level in the near term.

Onchain activity adds another layer of concern, with data indicating that large holders, or whales, have transferred 12,000 Bitcoin to exchanges over the past week. This marks the highest such inflow since November 2024, suggesting these major players are positioning for sales amid the recent rally. One particularly striking event involved a wallet dormant since 2013 activating to move 330 Bitcoin, valued at approximately $39 million, to fresh addresses, which has fueled speculation about imminent liquidations.

These inflows coincide with a 3.68% dip in Bitcoin's dominance within the crypto ecosystem, pointing to investors rotating capital away from the flagship asset in favor of alternatives. Exchange deposits like these typically precede profit-taking episodes, as whales seek to capitalize on peaks before broader sentiment sours. It would be a good idea to keep an eye on order books at big exchanges like Coinbase, where sizable sell orders could further dictate the pace of any rebound or continued descent.

Broader economic signals are compounding these pressures, as traders trim exposure in anticipation of the Federal Reserve's rate decision spanning October 29 and 30. Although analysts widely expect no immediate adjustment to interest rates, there is apprehension that Chair Jerome Powell might temper hopes for cuts in 2026 during his upcoming remarks. The Federal Open Market Committee announcement today has already contributed to erratic swings, with leveraged bullish bets in risk assets like cryptocurrencies becoming vulnerable to forced unwinding.

Bitcoin's linkage to traditional markets has grown stronger throughout 2025, making it sensitive to shifts in the U.S. dollar index and overall liquidity flows. A more restrictive tone from the Fed on inflation or labor data could bolster the dollar, indirectly squeezing capital available for digital assets. Conversely, signals of a softer stance might encourage a swift reversal, drawing buyers back into the fold and lifting prices from current levels.

This convergence of technical erosion, whale movements, and macroeconomic hesitance forms a challenging backdrop for Bitcoin and the crypto markets, echoing a broader risk-averse mood across the financial ecosystem. Despite the intraday losses, the asset's year-to-date performance stands at a solid 52.49% gain, underscoring its underlying resilience amid periodic tests. As the Fed's words echo through trading floors, the focus sharpens on whether defenders can hold the $107,000 threshold, preventing a slide toward the $103,000 zone that could test nerves further.