The price of Bitcoin (BTC) fell again after the latest Federal Open Market Committee (FOMC) meeting decision, dropping about 1.80% in the last 24 hours. This decline shows the same pattern as previous cycles, where crypto markets corrected after interest rate decisions were announced.

Repeating Pattern: Bitcoin Always Goes Down After FOMC Meeting

Through a post on his X account, a trader said that Bitcoin (BTC) price has historically always decreased after FOMC meetings. In the chart he shared, we can see a pattern of Bitcoin price declines after each FOMC meeting, with corrections of 10%, 6%, and 8% in the previous three periods, respectively. He also highlighted the potential for another post-FOMC “dump”, reinforcing his view that markets tend to react negatively to the Fed’s monetary policy decisions.

“Buy the Rumor, Sell the News” Effect After Interest Rate Cut

The Fed, under the leadership of Jerome Powell, lowered interest rates to a range of 3.75% to 4%, the lowest level since 2022 when the US central bank began raising rates to contain inflation. In theory, low interest rates should be a positive catalyst for risky assets like cryptocurrencies as it increases interest in high-yielding investments. However, things are different this time as the market has been expecting the cut for some time.

Analysts refer to this phenomenon as “buy the rumor, sell the news”, where investors buy assets before the announcement and sell them once the official news is released. In other words, interest rate cuts are already “discounted” in the price of crypto assets. As a result, when the decision was announced without any new surprises, market participants rushed to take profits. The sentiment became the main trigger for a massive price correction across the crypto market.

Large liquidations and declining open interest

Today’s crypto market decline was also driven by a surge in position liquidation. Data from a data platform shows 24-hour liquidations rose by around 75% to US$554 million. Meanwhile, open interest or total open positions in the crypto futures market also slumped, from around US$ 228 billion to US$ 164 billion (around IDR 2,721 trillion to IDR 2,723 trillion on a rough conversion). The combination of large liquidations and declining open interest suggests that many leveraged investors opted for a quick exit, amplifying the selling pressure.

That’s the latest information about crypto.