Fed just cut rates 25bps but Bitcoin dropped $3K: here’s the hawkish language in the statement that explains why [Market Update]

Pierce & Pierce Update | Wednesday, October 29, 2025 | Post FOMC

What Just Happened

• 2:00 PM ET: Fed cut rates 25bps (3.75%-4.00%) as expected

• Bitcoin: $109,894 (down from $113,380 this morning, -3.1%)

• Ethereum: $3,869 (down from $4,013 this morning, -3.6%)

• The $110K support level broke during the pre/post-Fed selloff

Link to this morning’s brief that outlined three possible scenarios: https://www.reddit.com/r/BitcoinCA/s/EfVZzeMHY4

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Why Did Crypto Sell Off After a Rate Cut?

The Fed statement contained hawkish language. Here are the exact lines from the official Fed release:

1. “Inflation has moved up since earlier in the year and remains somewhat elevated”

Translation: Fed still worried about inflation = less likely to cut aggressively going forward.

2. “The Committee will carefully assess incoming data… in considering additional adjustments”

Translation: No commitment to more cuts. They’re being cautious, not running a dovish cycle.

3. Split vote:

• Stephen Miran wanted 50bps (bigger cut)
• Jeffrey Schmid wanted 0bps (no cut)
• Shows disagreement at the Fed about policy path

Market expected: “We’re cutting and more cuts are coming”

What they got: “We’re cutting once, but inflation is concerning and we’re being careful”

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This Matches the “Hawkish Cut” Scenario

From this morning’s brief:

“Fed Cuts but Powell Sounds Hawkish: Powell cuts 25bps but signals ‘this might be the last cut for a while’ or emphasizes inflation concerns. Could send BTC toward $108K-$110K range.”

That’s what played out:

• ✅ 25bps cut delivered
• ✅ Hawkish inflation language in statement
• ✅ BTC now testing $108K-$110K zone

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What Happens Next?

Key levels:

Bitcoin:

• Current: $109,894
• Next support: $108K (breaks → $105K potential target)
• Resistance: $112K (needs reclaim to invalidate breakdown)

Altcoins:

• Ethereum down more than Bitcoin (-3.6% vs -3.1%)
• Bitcoin dominance still around 60%

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What the Fed Actually Said About Future Cuts

Key phrase from statement:

“The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks”

Translation: “We’re cutting today, but not promising anything beyond this.”

What could change this:

• Weak jobs Friday (NFP) → potential for more cuts
• Strong jobs Friday → cuts could pause for months
• Next Fed meeting: December 17-18

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One Positive: QT Ending

From the statement: “The Committee decided to conclude the reduction of its aggregate securities holdings on December 1.”

Translation: Quantitative Tightening ends Dec 1. Fed stops shrinking balance sheet.

Mildly bullish long-term, but market focused on hawkish inflation tone today.

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This Week’s Remaining Catalysts

Thursday (Oct 30):

• 8:30 AM ET: GDP Q3
• 8:30 AM ET: Jobless claims

Friday (Oct 31):

• 8:30 AM ET: PCE inflation (Fed’s preferred measure)
• 8:30 AM ET: Personal income & spending

Next week:

• Nov 5: ISM Services
• Nov 7: Jobs Report - next major catalyst

Hot PCE Friday → validates Fed’s hawkish stance

Cool PCE Friday → could ease concerns

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The Bottom Line

Fed delivered expected cut, but statement emphasized elevated inflation and careful approach to future cuts. This was more cautious than market hoped for.

Bitcoin breaking $110K support shows the hawkish tone outweighed the dovish rate cut. What happens at $108K support and Friday’s inflation data will likely determine whether this is a temporary dip or start of deeper correction.

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Morning Brief (outlined 3 scenarios): https://www.reddit.com/r/BitcoinCA/s/EfVZzeMHY4

Official Fed Statement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20251029a.htm

In depth Institutional grade intelligence available free at: https://pierce-pierce.ghost.io

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Discussion

Did you hold through the Fed decision or take profits before 2pm?

Watching $108K support or waiting for lower?

What’s your read on Friday’s PCE data?

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Disclaimer: Educational analysis, not investment advice.