The cryptocurrency market just wrapped up a pivotal trading session, as the U.S. Federal Reserve announced it would keep interest rates unchanged at 4.25–4.5%. The decision, largely aligned with market expectations following June’s 0.3% core CPI increase, has nonetheless triggered a shift in sentiment—particularly in the Bitcoin space.
Powell’s Cautious Tone Freezes Bitcoin Momentum
Bitcoin (BTC), after rallying near its recent highs, is now consolidating just below the $120,000 resistance level, trading within a tight range. While the surface-level market appears stable, deeper on-chain metrics suggest a subtle yet potentially significant shift: long-term holders (LTHs) are quietly reducing their positions.
This trend is often a defensive move, signaling early caution ahead of possible macroeconomic headwinds—some of which may not yet be fully priced into Bitcoin’s valuation.
Market Expectations Rattled by Powell’s Statement
Though the Fed’s hawkish stance had been partially baked into investor expectations, Chairman Jerome Powell’s post-meeting remarks stirred the pot. His statement—“We haven’t made any decisions for September”—sent ripples across financial markets, dramatically reshaping the projected policy trajectory.
Immediately following Powell’s comments, the probability of a rate cut in September dropped sharply from over 90% to just 41%. More notably, market models now reflect a 25% chance that the Fed might not cut rates at all through the remainder of 2025.
This abrupt shift has forced analysts and investors to re-evaluate the likelihood of a dovish pivot in Q4. Compounding this uncertainty are potential tax policy changes under former President Donald Trump, which may further disrupt short-term market dynamics.
Market Confidence Wavers Despite High Unrealized Gains
Although Bitcoin’s price structure remains technically intact, internal metrics paint a weakening picture. The Fear & Greed Index has started to trend downward, signaling a cool-down in investor risk appetite.
Glassnode data reveals that long-term holders have offloaded approximately 207,000 BTC in the past 30 days—a strategic redistribution that suggests growing caution even among Bitcoin’s most committed investors.
Meanwhile, total unrealized profit and loss (NUPL) has surged to a record-breaking $1.4 trillion. This ballooning figure hints at increasing pressure to realize gains, particularly in an environment where liquidity is steadily drying up due to the Fed’s delay in loosening monetary policy.
Q3 Outlook: Stalled Momentum, Shrinking Catalysts
As we move deeper into Q3, the Bitcoin market faces an uphill battle. The absence of fresh catalysts, combined with diminishing expectations for rate cuts, suggests that BTC could remain stuck below the critical $120,000 resistance level for the foreseeable future.
Profit-taking pressures are building, while confidence appears to be eroding. Without renewed investor optimism or a significant external spark, the rally that has defined much of 2025 so far could be entering a period of stagnation—or worse, reversal.
Conclusion:
Bitcoin’s resilience is being tested in real time. With Jerome Powell’s policy indecision creating fresh uncertainties and long-term holders beginning to unwind their positions, the market may be bracing for a slower, more volatile end to the year. Unless new catalysts emerge, the current consolidation may be more than just a pause—it could mark the beginning of a broader trend shift.
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