The Fed cuts interest rates by 25 basis points! Bitcoin stabilizes at $115,000, with potential for short squeeze ready to launch. The Fed has chosen to lower the interest rate from 4.50% to 4.25%, a reduction lower than the market expectation of 50 basis points, primarily influenced by inflation concerns. Nevertheless, Bitcoin remains supported above $116,330, with limited market liquidation and a significant concentration of short positions around $118,000. A breakout above this level could trigger a short squeeze of over $1.8 billion, providing upward momentum for BTC prices. The Fed's cautious rate cut showcases the resilience of the Bitcoin market. On September 18, as the market digests the Fed's latest actions, Bitcoin finds support above $116,330. The Fed chose to lower the interest rate from 4.50% to 4.25%, a reduction lower than the widely expected 50 basis points. This decision was primarily influenced by last week's overheated consumer inflation data, causing speculative traders to be uncertain about the future direction of U.S. monetary policy. However, the Federal Open Market Committee (FOMC) in an accompanying statement called for caution, indicating that job growth could slow and the unemployment rate may rise, presenting downside risks. Nonetheless, the committee still anticipates another 50 basis point cut later in 2025, though the exact timing remains unclear. Market liquidation is limited and far below expectations (Source: Coinglass). Earlier this week, gold prices surged to historical highs above $3,700, raising concerns that if the Fed's rate decision was unexpected, cryptocurrencies could face massive liquidation. However, trends in the derivatives market indicate limited downside impact. According to Coinglass data, the total liquidation in the cryptocurrency market reached $26.744 million within 24 hours, of which: · Long position liquidation: $17.864 million · Short position liquidation: $8.881 million. Notably, only $3.619 million of these liquidations occurred within one hour of the Fed's announcement, indicating that the market had already digested the Fed's decision without panic selling. Bitcoin longs defend key support, enhancing short squeeze potential (Source: Coinglass). The liquidation chart provides further insight into Bitcoin's recent trends. At first glance, shorts seem to have the upper hand, with $3.3 billion in active short positions exceeding $2.3 billion in long positions. However, a closer look reveals that over 35% of active long positions are concentrated around $114,458, of which $814 million may be liquidated. Since the in-day total liquidation of $26.7 million is far below this threshold, these positions are likely to remain intact. This means that if longs can hold above $114,500, Bitcoin still has the potential for an early rebound. Key price levels and potential breakout points: On the bullish side, a significant amount of short positions is concentrated around $118,000, with over $1.8 billion at risk of liquidation. Due to a lack of stronger resistance zones, breaking this level could trigger a short squeeze, pushing Bitcoin prices closer to the peak of $124,500 reached in August. Unless trading volume increases significantly, Bitcoin may consolidate between $114,000 and $118,000 in the short term, as market participants may remain cautious considering the Fed's concerns about unemployment risks. Market outlook: Fed policy and Bitcoin trends. Although the Fed's rate cut decision was below some market expectations, it still confirms the trend towards a looser monetary policy. The committee expects another 50 basis point cut later in 2025, which could provide ongoing support for risk assets, including Bitcoin. As the market adapts to the new interest rate environment, investors should closely monitor the following key factors: Changes in trading volume: A significant increase in trading volume may signal a breakout from the consolidation range. Key support level at $114,500: Longs must hold this level to maintain upward momentum. Potential breakout point at $118,000: Breaking this level may trigger a massive short squeeze. Stay updated on the latest Bitcoin movements to seize market volatility investment opportunities!