Bitcoin News Alert: Fed Holds Rates, Crypto Market Plunges as BTC Drops Below $118.5K
The cryptocurrency market faced a sharp downturn as Bitcoin (BTC) dropped 1% below $118,500 following the Federal Reserve’s decision to hold interest rates steady. Traders were caught off guard, leading to widespread liquidations and altcoin losses. Here’s what you need to know.
Why Did Bitcoin Drop After the Fed’s Rate Decision?
The Federal Reserve kept its benchmark interest rate between 4.25% and 4.50%, surprising traders who expected a hike. This led to:
- A 1% drop in Bitcoin (BTC) below $118,500
- Ethereum (ETH) falling over 2% to $3,725
- Altcoins like XRP and Dogecoin (DOGE) plunging 13-18%
Crypto Market Slump: Key Data Points
The broader market felt the impact:
| Metric | Change |
|---|---|
| Total Crypto Market Cap | ↓ 5% to $3.92T |
| Liquidations (24h) | $216M across 108K traders |
| Large BTC Transactions | ↓ 9.6% |
Will Bitcoin Recover or Fall Further?
Analysts suggest two possible scenarios:
- Bullish: A sustained move above $120K could push BTC to new highs
- Bearish: Breaking below $115K may trigger deeper corrections
Altcoin Losses Outpace Bitcoin
While Bitcoin saw moderate declines, altcoins suffered more:
- Dogecoin (DOGE) broke below its 20-day SMA, risking a fall to $0.19
- Ethereum futures volume surpassed Bitcoin’s for the first time
What’s Next for Crypto Markets?
Traders are now watching:
- Upcoming FOMC minutes
- August 1 tariff deadline
- Macroeconomic data releases
The coming weeks will be critical in determining whether cryptocurrencies can regain momentum or face prolonged pressure from macroeconomic uncertainty.
Frequently Asked Questions (FAQs)
Why did Bitcoin drop after the Fed meeting?
Bitcoin fell because traders expected a rate hike, but the Fed held rates steady, creating uncertainty about future monetary policy.
How much did altcoins like Dogecoin and XRP lose?
XRP and Solana dropped ~13%, while Dogecoin fell nearly 18% in the past week.
What was the total liquidation amount in crypto markets?
Over $216 million was liquidated across 108,863 traders in 24 hours.
Could Bitcoin drop below $115K?
If selling pressure continues, Bitcoin could break below $115K, potentially triggering deeper corrections.
Is Ethereum outperforming Bitcoin?
Ethereum’s perpetual futures volume recently surpassed Bitcoin’s for the first time, suggesting growing altcoin interest.
