FOMC confirms 25 basis point rate reduction in September Bitcoin volatility spike

Bitcoin (BTC) was whipped on September 17 after the Federal Reserve confirmed its interest rate cut of 25 basis points, reducing its federal funding target range from 4% to 4.25%.

The decision also reduced the interest rate paid on the reserve balance to 4.15% and lowered the primary credit rate to 4.25%. Both are valid on September 18th.

The Fed said the New York Fed's open market desk will implement open market operations to maintain its new range, including a $500 billion overnight repurchase agreement and a $160 billion daily limit for the $160 billion in reverse repository.

Based on the encrypted data, Bitcoin surged to $116,318, prior to the statement, prior to the statement, as traders “selled the news.”

The decline was violent, but short-lived, with Bitcoin recovering to $115,639 at press time.

The rapid swing highlights that digital assets remain extremely sensitive to dollar liquidity and changes in Fed policy.

Interest rate cuts were widely expected, but within months of maintaining borrowing costs it marked the Fed's first policy adjustment. The speed of Bitcoin's response highlighted how traders position changes in financial conditions, but the market was worthy of decisions.

Investors are currently awaiting a press conference by Chairman Jerome Powell later on further guidance on whether central banks can offer additional cuts by the end of the year.

Also, stocks discovered volatility after the announcement, but the Treasury Department was lower because the bond market prices are lower in loose financial conditions. Bitcoin's exaggerated movement reflected wider risk sentiment, but with a more sharp day shaking.