Bitcoin Holds Near $113K as Traders Turn Cautious Ahead of Fed Decision

October 29, 2025 — Bitcoin (BTC) steadied around $113,000 in Wednesday’s Asian session as traders pared risk ahead of this week’s Federal Open Market Committee (FOMC) meeting, with thinning liquidity and a stronger U.S. dollar weighing on sentiment across risk assets.

The cryptocurrency remains up 4.5% over the past week but slipped 0.7% in the past 24 hours, tracking modest declines in broader crypto markets. Ether (ETH) traded near $4,028, down 1.4%, while Solana (SOL) and Binance Coin (BNB) each fell about 2%. XRP outperformed, holding slightly higher at $2.62 after a week of strong inflows into high-volume tokens.

Markets are bracing for the FOMC’s Oct. 28–29 policy decision, where officials are widely expected to cut benchmark interest rates by 25 basis points, bringing the target range to 4.00%–4.25%.

“The fluctuating macroeconomic backdrop remains the dominant driver of this crypto cycle,” said Thomas Perfumo, Global Economist at Kraken. “A 25bps cut this week is largely priced in, but the October 10 sell-off showed how exposed crypto remains to macro shocks.”

Perfumo added that while institutional inflows remain steady, short-term momentum has softened as corporate treasury accumulation slows. “Demand from digital-asset treasuries like MicroStrategy has eased, but ETF flows are still net positive — highlighting growing institutional participation even as short-term risk tolerance wanes,” he said.

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Liquidity Tightens as Risk Appetite Cools

Beyond the Fed, traders are monitoring a pullback in market depth across major centralized exchanges (CEXs). Early signs of renewed stress among U.S. regional banks and persistent macro uncertainty have pushed liquidity to roughly 40% of pre-selloff levels, according to several market desks.

“Liquidity is tightening,” said Alice Li, Partner at Foresight Ventures. “Signs of regional bank strain could force the Fed to slow QT earlier than planned, but sticky inflation keeps policymakers cautious. BTC and altcoins are showing broader risk-off behavior.”

Li noted that exchange-linked tokens, led by BNB, were relatively resilient after weeks of deleveraging, while speculative altcoins remained volatile and event-driven.

Despite softer tone, analysts say the market is stabilizing following the October 10 liquidation, which erased nearly $1.2 billion in leveraged positions. Total crypto market capitalization remains around $3.9 trillion, still above key technical averages.

“BTC continues to hold above its 50- and 200-day moving averages,” said Alex Kuptsikevich, Analyst at FxPro. “Resistance remains strong near $117K–$120K, but the rebound from $108K keeps the broader bull trend intact.”

As traders position for the Fed decision, volatility may spike midweek if Chair Jerome Powell’s comments signal a slower pace of rate cuts or highlight lingering inflation risks.