Fed Rate Decision Rocks Markets: Stocks & Crypto Tumble—What’s Next?

Markets reel as the Fed’s latest rate decision sends shockwaves through both traditional and digital asset classes. Here’s the breakdown.

The Domino Effect

Equities and cryptocurrencies slid in unison after Powell & Co. doubled down on hawkish policy—proving once again that the Fed holds the marionette strings for risk assets.

Crypto’s Brutal Reality Check

Bitcoin and altcoins bled alongside tech stocks, crushing the 'decoupling' narrative faster than a DeFi rug pull. Turns out, liquidity conditions still matter—even for 'hedges against inflation.'

Silver Linings Playbook

Volatility means opportunity. Savvy traders are already eyeing oversold conditions, while institutions quietly accumulate. (Funny how Wall Street always finds a way to profit from retail panic.)

The Fed giveth, and the Fed taketh away. But for those who understand the game, every dip is just another setup.

Crypto losses follow Powell’s statement

The fallout wasn’t limited to stocks. Over $212 million was wiped out from the crypto market in the hour following Powell’s comments. That sharp liquidation hit Bitcoin hardest.

One of the most-watched indicators for U.S. demand, the Coinbase Premium Index, turned negative for the first time since May 29, ending a 62-day positive streak. The index compares Bitcoin prices between Coinbase and Binance and is often seen as a measure of institutional interest in the U.S.

Before flipping negative, the premium index had held positive for a record 94 days, showing strong demand from American buyers. That run is now over, and traders are reassessing positioning. While the sudden drop may signal a cooling appetite, the rest of the data paints a mixed picture.

The funding rate for futures contracts stayed flat at 0.01, meaning neither bulls nor bears had a clear advantage. At the same time, the cumulative volume delta (CVD) kept pointing to ongoing sell pressure. Still, the lack of a major breakdown in price shows that buyers haven’t disappeared entirely. The imbalance between selling and price stability hints at a possible shakeout, but no collapse.

There was also no sign of panic from long-term holders. The Net Realized Profit/Loss (NRPL) metric showed no major profit-taking. And the Adjusted SOPR, a signal used to gauge whether traders are selling at a loss or gain, stayed under the 1.10 level that typically signals overheated markets. That suggests people aren’t rushing to cash out despite the dip.

The decision to hold interest rates wasn’t unanimous. Two members of the Fed board, Michelle Bowman and Christopher Waller, dissented. Both wanted a quarter-point cut instead. While they were outvoted, their stance highlights disagreement inside the central bank about how aggressive monetary policy should be in the face of rising prices from Trump’s trade moves.

Traders had been expecting at least one rate cut before the end of the year. Powell’s comments made it clear that the timeline is now uncertain. With tariffs pushing up costs on some imported goods, the Fed appears to be in a wait-and-see mode. That uncertainty is now baked into market sentiment.

By the closing bell, early Optimism had vanished. The markets had turned on Powell’s words. The Fed is holding steady, tariffs are heating up, and both stocks and crypto took the hit.

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