The crypto market dropped slightly after the Fed rate cut on Wednesday, September 17. As expected, the Federal Reserve initiated its first rate cut of 2025 by slashing its benchmark interest rate by 25 bps to 4% and 4.25%. Additionally, the Fed signaled a 50 bps rate cut before the end of this year, supported by the majority of the commissioners.
However, the crypto market cap dropped 1% to hover about $4.1 trillion during the mid-North American session. Bitcoin (BTC) price slipped 1% to hit a range low of about $114,940 before rebounding slightly to trade around $115,698 at the time of this reporting.
The crypto market was bound to experience a sell-the-news narrative following the Fed rate cut especially after the majority of traders predicted the outcome correctly. Traders who had been buying the rumors have accelerated profit-taking on the news today.
While the Fed initiated its first rate cut of 2025, the commissioners voted to continue with Quantitative Tightening (QT). The Fed has been shrinking its balance sheet by selling government bonds.
“The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities,” the Fed noted.
As a result, the Fed will continue to pull liquidity from the financial system, thus weighing down on the crypto bullish outlook.
Bitcoin and Ethereum had led the wider crypto market in a bullish outlook during the past few weeks but the momentum has gradually faded. For instance, Solana price has struggled to rally beyond $250, XRP price has failed to rally above $3.2, and Ethereum price has experienced a significant supply wall around $4,777.
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
All opinions and insights shared represent the author's own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Bitcoin has eased after touching a record $125,700, now trading near $121,000. The price movement…
Canary Capital, a crypto investment firm, has filed amended S-1 filings for spot Litecoin (LTC)…
Peter Brandt, a veteran trader, has cautioned a potential bearish outlook for XRP in the…
Bitcoin (BTC) price experienced a flash selloff on Tuesday after hitting its all-time high (ATH)…
Binance Coin (BNB) has possibly entered its parabolic phase. The large-cap altcoin, with a fully…
Dogecoin (DOGE) remains one of crypto’s most recognisable names, but many long-term holders are beginning…
