Market Reaction to Fed Minutes
Bitcoin (BTC) experienced a significant decline again today. The minutes of the Fed's latest meeting revealed that policymakers want to see more evidence for another interest rate cut, adding to market uncertainty.
On-Chain Data and Investor Behavior
Timothy Misir, Director of Research at BRN, noted that on-chain data points to market tension. Misir said Bitcoin's decline below its 0.75 cost-based ratio is “a threshold that historically separates ordinary pullbacks from deeper trend reversals.”
According to Misir, Bitcoin is currently pushing the Active Investors zone, and the loss of this level signals a critical period for the trend. Misir argues that retail investors are selling during this period, while large investors are accumulating. He noted that wallets holding more than 1,000 BTC have recently increased by 2.2%, reaching a four-month high.
“Today's events suggest stabilization following a capitulation rather than a new start to momentum,” Misir said, arguing that Bitcoin needs to reclaim the 0.75 ratio before regaining bullish momentum. “Expect volatility and sharp reversals in both directions until these levels are achieved.”
Federal Reserve's Stance on Interest Rates
The Fed's published minutes did not provide a clear answer to market expectations of a December interest rate cut. Officials acknowledged that progress had been made in inflation but stated that “additional confirmation” was needed before further action could be taken. This suggested that easing monetary policy was possible but not guaranteed.