Bitcoin Holds $90K After Fed Rate Cut Volatility, Altcoins Slide

Bitcoin’s trading narrative last week was dominated by the Federal Open Market Committee (FOMC) meeting. As anticipation built for another interest rate cut, BTC surged from under $90,000 to a multi-week peak of $94,500 on Tuesday. The rally reflected market positioning ahead of the expected monetary policy easing. Following a slight pre-meeting retreat, the official announcement of a 25 basis point rate reduction by the Fed triggered another bullish attempt, though it was capped at $94,400.

This rejection proved significant, leading to a sharp correction that drove Bitcoin’s price below $89,500. The bulls mounted a recovery to $93,600 on Thursday, but failed to sustain momentum. Volatility continued into Friday with a sudden $3,000 drop, which was quickly reversed as buyers stepped in to reclaim the $90,000 level. Despite external factors like remarks from former President Donald Trump on interest rates and escalating tensions with Venezuela, Bitcoin has held above this key psychological and technical support, with its market cap remaining above $1.8 trillion and its dominance over alternative cryptocurrencies (altcoins) at 56.9%.

The selling pressure was not confined to Bitcoin. The broader cryptocurrency market experienced a notable correction. Ethereum, the second-largest digital asset, dipped below $3,100 during Friday’s sell-off. Although it has since reclaimed that level, ETH remains down 3.8% on the day, trading just inches above the $3,100 mark. Other major altcoins followed suit, with Solana (SOL) and Cardano (ADA) each declining by approximately 3%.

The downturn extended to other prominent assets, including Tron (TRX), Dogecoin (DOGE), Chainlink (LINK), and Stellar (XLM), which posted losses ranging from 1.5% to 2.5%. The most pronounced declines were seen in tokens like Hyperliquid (HYPE) and Ethena (ENA), which dropped by 4-5% to $28 and $0.25, respectively. In contrast, a few assets bucked the trend, with Hash (HASH) skyrocketing 13.5% to $0.03 and M surging 8% to $1.67. The net effect was a reduction in the total cryptocurrency market capitalization by around $40 billion in a day, bringing it down to $3.175 trillion.

The week’s price action serves as a potent reminder of the cryptocurrency market’s entrenched sensitivity to U.S. macroeconomic policy. The Fed’s interest rate decision acted as the primary catalyst, triggering predictable volatility as traders priced in the news. The initial rally on anticipation, followed by a ‘sell-the-news’ reaction and subsequent stabilization, is a classic pattern observed in risk assets during major central bank events.

Bitcoin’s ability to defend $90,000 suggests a level of underlying support, but the concurrent altcoin declines indicate a risk-off rotation or profit-taking across the board. The market’s reaction to comments from figures like Donald Trump, alongside geopolitical concerns, further highlights how digital asset valuations are increasingly intertwined with traditional financial and political narratives. As the market consolidates, the focus will remain on Bitcoin’s hold above $90,000 and whether altcoins can find a footing, with Federal Reserve policy remaining a key driver of sentiment and capital flows in the crypto sector.