Bitcoin Near $113K as Traders Await Pivotal Fed Policy Move

Bitcoin traded close to $113,000 during Wednesday’s afternoon session in Asia, as investors adopted a cautious stance ahead of the U.S. Federal Reserve’s upcoming policy decision. Declining liquidity and a strengthening U.S. dollar weighed on sentiment across broader risk assets. Although the leading cryptocurrency has risen 4.5% over the past week, it dipped 0.7% in the last 24 hours, reflecting mild declines across major digital assets. Ether (ETH) fell 1.4% to $4,028, while Solana (SOL) and Binance Coin (BNB) each lost roughly 2%. XRP, however, held slightly higher at around $2.62, extending its recent week-long rally as traders shifted toward high-volume tokens. These movements precede the Federal Open Market Committee (FOMC) meeting scheduled for October 28–29, where policymakers are widely expected to lower interest rates by 25 basis points to a range of 4.00%–4.25%.

Thomas Perfumo, Global Economist at Kraken, emphasized that the evolving macroeconomic landscape continues to drive the current cryptocurrency cycle. He stated that a 25-basis-point rate reduction appears highly likely and that the market is already anticipating another cut by December. However, he cautioned that the sell-off on October 10 highlighted how vulnerable cryptocurrencies and other risk assets remain to external shocks. Perfumo also observed that while institutional inflows have moderated, longer-term investment capital remains steady.

He added that demand from corporate digital-asset treasuries such as MicroStrategy has slowed, even as exchange-traded fund (ETF) inflows stay positive, reflecting growing integration between crypto and traditional finance. Nonetheless, short-term investor confidence has weakened since the market’s sharp liquidation earlier in October.

Market participants are also monitoring signs of tightening liquidity. Renewed stress in U.S. regional banks and lingering uncertainty in the global economic outlook have reduced market depth across centralized exchanges. Alice Li, Partner at Foresight Ventures, noted that liquidity has contracted significantly, with centralized exchange order-book depth falling to about 40% of pre-decline levels. She explained that while banking sector concerns might encourage the Fed to slow its quantitative tightening, persistent inflation pressures are likely to make officials proceed cautiously.

Tokens associated with exchanges, led by BNB, showed relative strength after recent deleveraging episodes, whereas speculative altcoins remained largely event-driven and lacking conviction, according to Li.

Despite the restrained sentiment, several analysts believe the crypto market is stabilizing following the sharp October 10 downturn that erased approximately $1.2 billion in leveraged positions. The total market capitalization of cryptocurrencies now stands at around $3.9 trillion, remaining above key moving averages, though investor confidence is still fragile.

Alex Kuptsikevich, Analyst at FxPro, commented that Bitcoin’s technical indicators continue to appear favorable. The asset remains above its 50-day and 200-day moving averages, with resistance identified near $117,000–$120,000 and strong support around $108,000, maintaining a generally bullish structure. As liquidity remains constrained and leveraged positions begin to rebuild, volatility could increase around Wednesday’s Fed announcement, particularly if Chair Jerome Powell adopts a more cautious stance on future monetary easing.