Short The Dip And Buy The Rip? What Fomc Outcomes Reveal About...
Bitcoin’s reaction to FOMC decisions often conflicts with traders’ predictions. Will today’s Federal Reserve interest rate outcome lead to a rally or sell-off?
Bitcoin (BTC) price surged above $94,000 on Tuesday, a day before the Federal Open Market Committee (FOMC) interest rate decision, and history suggests that traders should brace for volatility.
Throughout 2025, BTC’s performance around FOMC meetings revealed that macroeconomic expectations are often priced in, and this front-running by traders can overshadow the actual impact of the policy decision itself.
Bitcoin has historically sold off after most FOMC events, including during rate-cut cycles.
BTC’s biggest inflows and leverage built up before FOMC events, thinning spot liquidity and amplifying price volatility after the Fed decision.
Bitcoin’s reactions to the seven FOMC decisions in 2025 revealed a pattern of anticipatory pricing followed by inconsistent, often negative post-event moves. Here is how BTC reacted over the seven-day window after each meeting:
Seven-day BTC returns after each meeting ranged from +6.9% to –8%, with interest rate-cut meetings delivering the weakest performance. That divergence became clearer when viewed through market structure rather than macroeconomic headlines. These outcomes pointed to a set of consistent structural drivers behind BTC’s reactions:
Before multiple meetings, most notably July, September and October, funding rates and open interest rose sharply, indicating an over-leveraged market. As illustrated in the chart, new-money (one day to one month) profit realized peaked in May, July and September, which also marked the recent BTC peak.
Much of the “dovish upside” was already embedded in the price, leaving BTC with limited marginal buying power once the FOMC announcement was made.
The September and Oct. 25-BPS cuts were followed by –6.9% and –8% seven-day decline. The easing cycle was already priced in through pre-FOMC inflows and aggressive long positioning, creating vulnerability rather than support when the cut became official.
Source: CoinTelegraph
