Bitcoin has extended its decline after the Federal Reserve held rates steady in a sharply divided decision, with traders weighing policy uncertainty against weakening market momentum.
According to the Federal Open Market Committee, policymakers voted 8-4 to keep the federal funds rate in the 3.5% to 3.75% range.
The details of the meeting confirmed the central bank’s intent to hold “the target range for the federal funds rate at 3-½ to 3-¾ percent” as it navigates risks to inflation and employment.
Citing “developments in the Middle East,” the Fed noted an environment of “uncertainty” tied to rising global energy prices, adding that inflation remains elevated and reinforcing the decision to avoid immediate easing despite a 4-member dissent against the rate hold.
According to Reuters, this was the most divided Federal Reserve policy decision since October 1992.
Bitcoin reacts to policy split as volatility builds
Following the announcement, Bitcoin slid from around $76,200 to below $75,000 before stabilising near $75,440, while a separate data point showed an intraday low of $74,937, briefly breaking below the 20-day moving average at $75,664 that traders had identified as a key level.
Analysing the situation, Hyblock CEO Shubh Varma called the move “the usual sell the news reaction after the FOMC,” adding that BTC “quickly recovered to pre-announcement levels within hours, showing strong underlying conviction.”
Varma pointed to a spike in the global bid ask ratio to 0.3, “one of the highest readings,” while open interest fell on the price drop, calling it “classic post-FOMC position squaring and stop-hunt behavior rather than conviction selling.”
At the same time, derivatives positioning pointed to caution, as Bitcoin’s perpetual futures funding rate turned negative after briefly trending neutral to bullish on Coinglass.
This usually means that sellers were paying to maintain positions while demand for leveraged shorts increased.
Meanwhile, data from major exchanges gave mixed signals, with top traders on Binance posting a long-to-short ratio of 0.80, slightly above Tuesday’s 0.75 but still leaning bearish.
Trading activity on OKX, however, revealed short-lived bullish positioning that failed to sustain momentum.
Momentum weakens despite institutional support
Before the Fed decision, analysts at Glassnode observed rising open interest during Bitcoin’s rally toward $79,000 alongside neutral funding and divergence between spot and futures volume, signalling growing bearish leverage.
In its Week Onchain report, Glassnode described Bitcoin as “trapped below market mean,” identifying $65,000 to $70,000 as a support zone while noting that weak demand has limited the strength of recent rallies.
The report added that failure to reclaim the $79,000 True Market Mean, combined with increased profit-taking by short-term holders and futures markets turning net short, has reduced short-term bullish momentum and raised sensitivity to downside moves.
Even with that pressure, institutional demand has remained visible, as Glassnode pointed to spot Bitcoin ETF inflows and rising Chicago Mercantile Exchange open interest forming a “dense accumulation cluster between $65K and $70K.”
Separately, corporate buying has continued to support long-term positioning, with Strategy acquiring 56,235 BTC over the past four weeks through its STRC perpetual preferred issuance, bringing total holdings to 818,334 BTC and surpassing BlackRock’s IBIT ETF exposure.
At the same time, whale positioning showed a more stable trend, with long-to-short ratios across major exchanges staying mostly unchanged over the past week, suggesting whales have not turned more bearish.
Data from Binance showed top traders at a 0.80 long-to-short ratio, up slightly from 0.75, while OKX saw brief bullish positions that did not last.
As equities struggle near record levels and oil prices climb toward $120 amid ongoing geopolitical tensions, Bitcoin’s inability to reclaim levels above $78,000 has coincided with cautious positioning rather than aggressive selling.
At press time, Bitcoin was trading at $75,374, down 2.4% on the day.