Bitcoin Drops 4% Despite Fed Rate Cut, Key Levels in Focus

The Federal Reserve’s announcement of a 25-basis-point rate cut has failed to provide the expected boost to Bitcoin, with the flagship cryptocurrency dropping nearly 4% in the past 24 hours and breaking below the recently reclaimed $110,000 area. This decline represents a significant technical development as Bitcoin has been trading within the $108,000-$120,000 price range since July but has now lost its local range low for the first time in a week. The current price action at $106,700 marks the lowest level Bitcoin has seen in seven days, raising concerns among traders about potential further downside.

Analyst Ted Pillows suggests this market volatility was expected, noting that Bitcoin has shown similar price behavior since the start of the third quarter. According to his analysis, Bitcoin has dropped 6%-8% after each of the last three Federal Open Market Committee meetings, yet has consistently made new all-time highs before the subsequent meeting. The pattern shows BTC’s price typically reaches its local bottom 5-9 days after the FOMC gathering, then quickly recovers and rallies to new highs in the following weeks. With price currently retesting the $106,000 area, Ted predicts that a repeat of this historical pattern could occur, though he emphasizes that Bitcoin must reclaim $113,500 in the coming days to prevent a larger pullback.

Multiple technical analysts have identified specific price levels that will determine Bitcoin’s near-term direction, with particular emphasis on this week’s closing price. Ted Pillows warned that “a weekly close below that level will increase the likelihood of a bigger correction,” referring to the $113,500 threshold. Similarly, Rekt Capital pointed out that Bitcoin must close the week above $114,500 to turn this level back into support. He noted that after recent performance, a volatile retest of this level would be “perfectly fine” as long as price closes above this crucial level at week’s end.

The significance of these levels extends beyond immediate price action. Rekt Capital explained that confirming the range low of approximately $114,000 as support would confirm re-entry into the trading range, kickstart consolidation within the range again, and enable movement toward the range high of approximately $119,000. This would represent a critical step toward breaking out from the current range and challenging the $120,000+ territory once more. The convergence of analyst opinions around these specific price zones underscores their technical importance in the current market structure.

Michaël van de Poppe added another layer to the analysis, affirming that $112,000 represents the next key area to break before a new all-time high can be achieved. He noted this level has served as crucial resistance on the daily timeframe for the past several weeks. According to his assessment, a breakout from this area could set the base for a retest of the $119,000-$120,000 zone, while rejection from this level could send price toward $103,000 or lower. Despite the current volatility, van de Poppe maintained his bullish outlook, stating “I do think we’ll see a new ATH in November.”

While current price action concerns traders, historical data provides context for potential bullish developments. Daan Crypto Trades highlighted that Bitcoin is “just playing ping pong” between its key levels and will likely continue moving within its range until one boundary is successfully broken. More significantly, he noted that November has historically been one of Bitcoin’s strongest months, which could suggest a price rally may be forthcoming. According to CoinGlass data, 8 out of 12 Novembers have closed in positive territory, with a median return of 10.82%.

The end-of-year period has traditionally been significant for Bitcoin markets beyond just November’s performance. Daan Crypto Trades observed that the last two months of the year are when the three previous bull runs topped and the past two bear markets bottomed. This pattern suggests that regardless of directional bias, “whether it’s on the bullish or bearish side, volatility and big market pivots have been the theme into the end of the year.” This historical context provides traders with both caution and opportunity as Bitcoin navigates its current technical challenges while approaching a seasonally strong period.