Bitcoin, cryptocurrencies fail to rally as Fed Chair sparks cautious sentiment

• Bitcoin declined below $111,000 and Ethereum held steady under $4,000 after the Fed decision on Wednesday.
• The Federal Reserve continued with its monetary easing path in its October meeting, reducing interest rates by 25 bps.
• The market is dominated by cautious sentiment after Powell signaled that a third rate cut in December is far from guaranteed.

Bitcoin (BTC) declined from $115,000, reaching the $110,000 key level on Wednesday, after the Federal Reserve (Fed) signaled cautious sentiment despite delivering a widely anticipated 25 basis points (bps) rate cut at its October meeting.

Ethereum (ETH) fell below $4,000, breaching the $3,900 level before bouncing near $3,850, while XRP edged down slightly toward $2.5.

The decline sparked more than $589 million in crypto liquidations over the past 24 hours, with long liquidations dominating at $454.8 million, according to Coinglass data.

Bitcoin longs were hit the hardest, with $190.7 million in positions wiped off the market. Ethereum followed with $126.4 million in long liquidations. The largest liquidation was a BTCUSD position worth $11 million on Bybit.

Powell's remarks spark caution among investors

At its October meeting, the Fed continued its monetary easing path, reducing interest rates by 25 bps to 3.75%-4%. While the market widely anticipated the decision, Fed Chair Jerome Powell caught investors off guard in his comments after the decision, signaling that the agency may adopt a wait-and-see approach in its next meeting.

"A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it," said Powell. He suggested that a lack of comprehensive economic data due to the current US government shutdown could prevent the agency from continuing on its current path. Powell also highlighted differing views among policymakers on the next step forward.

"Today's cut is supportive, but the shutdown's data blackout means subsequent Fed moves are now unpredictable, and that's what markets hate most," RedStone co-founder Marcin Kazmierczak told FXStreet. "This uncertainty likely means Bitcoin and broader crypto volatility through year-end," he added.

Market participants are now looking towards the outcome of US President Donald Trump's meeting with Chinese President Xi Jinping on Thursday.

The general crypto market is down about 1% over the past 24 hours at the time of publication.