Bitcoin Dips Below $110K After Fed Warning—But Here’s Why That’s Not a Red Flag

Just weeks ago, bitcoin flirted with all-time highs, topping $100,000 and pushing even higher on post-election enthusiasm and expectations of a more crypto-friendly regulatory environment.

Then Jerome Powell stepped in.

On October 29, the Federal Reserve Chairman announced the FOMC's decision to cut the interest rate by 25 basis points, but cautioned against assuming further cuts in December. Powell's remarks drove the market reaction that a further reduction was 'not a foregone conclusion,' signaling a less dovish outlook than many investors had hoped for.”

Markets didn’t take it well.

Bitcoin dropped after the comments, with the price falling sharply from its recent highs above $126,000 as the prospect of fewer future rate cuts spooked risk assets.

Is the bull market in crypto over—or just taking a breath?

Let’s unpack it.

Why the Fed Still Matters to Bitcoin

Although bitcoin has long been positioned as a hedge against inflation and monetary mismanagement, it's still seen as a risk asset by many institutional players. And when Powell speaks, the big money listens.

While the rate cut itself injected some liquidity, Powell's cautious tone regarding future easing quickly pulled money out of riskier assets—including crypto—as markets priced in a slower path to lower borrowing costs.

But here’s the critical distinction: pullbacks like this aren’t new. In fact, they’ve been a defining feature of every major bitcoin cycle going back a decade.

• In 2020, bitcoin fell nearly 50% after the COVID panic… and then soared from lows near $3,800 to eventually reach an all-time high near $69,000 in late 2021.
  
  
• In 2021, bitcoin dropped from $64,000 to $30,000, only to rally back to new highs by November.
  
  
• In 2024, BTC has already seen multiple pullbacks of 20% or more—and fresh all-time highs have followed each one.
  
  

The story isn’t about the dips. The story is that despite them, Bitcoin has had a solid performance, still up approximately 20% year-to-date in 2025, following a significant bull run in the previous year.

The Macro View: Interest Rates, Liquidity & Bitcoin

Let’s zoom out.

Powell’s latest cautious tone comes amid signs of economic resilience. Inflation is cooling—but not fast enough. The Fed has already cut rates twice in 2025, but caution about the remaining meetings means the path of easing is slower than the market initially projected for the year.

That matters. Here's why:

• Higher interest rates = stronger dollar = weaker bitcoin (short term).
  
  
• But tighter monetary policy also puts pressure on traditional assets.
  
  

If Powell is wrong and economic growth slows more than expected, the Fed may have to reverse course quickly—triggering a flood of liquidity back into hard assets like bitcoin.

And with institutional adoption accelerating (BlackRock, Fidelity, and the continued, high-profile debate over corporate treasuries, such as the shareholder proposal for Microsoft to add bitcoin to its balance sheet), the long-term tailwinds for crypto are still intact.

What Smart Investors Are Doing Right Now

Corrections like this are painful—but they’re also predictable.

Veteran investors know that bitcoin’s path higher is never a straight line. Volatility is the price of admission. What separates long-term winners from short-term speculators is risk management and perspective.

Here’s how smart capital is handling this moment:

• No panic selling. If anything, these dips are being used to accumulate.
  
  
• Smaller altcoin positions are being trimmed or rotated into higher-conviction assets.
  
  
• Volatility is being embraced—not feared—as a feature of asymmetric upside potential.
  
  

Put simply: this is not a time to bail. This is a time to reassess, rebalance, and reload.

Final Thought: The Signal Beneath the Noise

Markets are emotional. But wealth is built on clarity, not fear.

Bitcoin dipping below $110K doesn’t change the fact that it's the best-performing asset of the past decade. It doesn’t change the increasing momentum toward corporate and government adoption. And it doesn’t change the structural reality of limited supply versus increasing demand.

Fed noise will come and go.

But for those with vision and patience, the real story is still unfolding—and it’s playing out in your favor.

This is not the end of the bull market. It’s a pause. And for some, it’s a second chance.