Bitcoin is pressing into the week with the kind of coiled energy that precedes trend-defining moves, as traders price in a near-certain Federal Reserve 25bps rate cut and whisper about a clean break toward $120K. With CME FedWatch showing overwhelming odds and institutions reportedly holding $117B+ in BTC, the Oct 29 decision is less about surprise and more about the market’s reaction function—does a cut ignite a liquidity chase, or trigger a classic “sell the news” fade?

What’s Happening

The Federal Open Market Committee is widely expected to trim rates by 25bps. Historically, easing cycles enhance risk appetite by lowering discount rates and loosening financial conditions—supportive for crypto. Bitcoin sits near major psychological resistance, with traders watching if a confirmed cut fuels a breakout, or if hawkish guidance sparks a shakeout first.

Why This Matters to Traders

- A cut can weaken the dollar and nudge yields lower—often tailwinds for BTC. - Institutional positioning is material; large holders can amplify moves through liquidity gaps. - Event-driven volatility tends to cluster around the statement and press conference; the first move is often noise, the second move shows intent.

The Playbook: Scenarios to Prepare For

• Cut + Dovish Tone: BTC impulse higher, breakout confirmation more likely if dollar slips and real yields ease. Look for retest holds to add.
• Cut + Hawkish Tone: Knee-jerk spike can reverse. Expect liquidity grabs above obvious highs, then rotation into range or downside.
• No-Cut/Negative Surprise: Risk-off impulse. Focus on defense, let volatility settle before redeploying.

Levels and Triggers to Track

Map the pre-FOMC range. The market often respects:

• Range High: Break and hold above with rising spot bid and cooling funding = higher-probability continuation.
• Range Low: Lose it on accelerating futures open interest and rising basis = caution for deeper pullback.
• Round Numbers: $120K is a magnet—watch for traps and failed breakouts before committing size.

Actionable Game Plan

• Trade the second reaction: Let the initial spike fade or confirm; enter on the retest with a tight invalidation.
• Size down into the event: Volatility and spreads widen—scale up only after structure confirms.
• Use clear invalidation: If your breakout fails back into range, cut quickly. Avoid “hope” holds.
• Monitor cross-market: DXY, US 10Y yields, BTC perp funding/OOI, and spot vs. perp divergence for signal quality.
• Consider hedges: Options (where available) or partial profit-taking around extremes to manage tail risk.

Risks You Can’t Ignore

- Guidance risk: A dovish cut can be offset by cautious forward guidance in the press conference. - Liquidity traps: Wick-heavy stop hunts around obvious highs/lows into and just after the decision. - Crowded positioning: If longs are extended, even “good news” can produce a sharp shakeout before trend resumes.

Bottom Line

This FOMC isn’t just about the cut—it’s about how BTC responds at a pivotal $120K threshold with institutions in size. Keep a flexible bias, let the second move confirm, and execute with disciplined risk management. The biggest edge this week is patience and precision.

If you don't want to miss any crypto news, follow my account on X.