Bitcoin Drops Below $110K After Fed Cut as China Trade Talks Fail to Boost Market

Market Turbulence Following Fed Decision

Bitcoin experienced a significant price drop and massive liquidations following the Federal Reserve's latest interest rate decision and amid ongoing US-China trade negotiations.

• Bitcoin fell to $110,900 after the Fed's 25 basis point rate cut.
• $1.1 billion was liquidated in 24 hours, with long positions suffering nearly $962 million in losses.
• Fed Chair Jerome Powell stated a December rate cut is "not automatic," causing market uncertainty.

Fed Announcement Sparks Sell-Off

Despite implementing a rate cut that typically supports risk assets, the market reacted negatively to Powell's hawkish tone regarding future cuts. This statement caused prediction market odds for a December cut to drop from 90% to 71%, spooking leveraged traders who had anticipated continued monetary easing.

Major Liquidations Hit Exchanges

The price decline triggered massive liquidations across major platforms. The single largest position wiped out was an $11 million Bitcoin long on Bybit, with Binance and Hyperliquid also seeing hundreds of millions in liquidations.

US-China Trade Developments

Meanwhile, US-China trade talks showed some progress as Treasury Secretary Scott Bessent indicated threatened 100% tariffs are "effectively off the table." Both sides claimed reaching a "preliminary consensus," though China maintains significant leverage through its 70% control of global rare earth mining.

Market Outlook

While the Fed announced it will stop shrinking its balance sheet in December, potentially adding liquidity to markets, Powell's cautious comments overshadowed this positive development. Santiment data shows funding rates have normalized, suggesting excessive leverage has been flushed from the system, which could lead to healthier price action once volatility subsides.