Bitcoin’s drop below $80,000 owes more to the security incident that hit Binance than to the Federal Reserve’s rate hold, if liquidation figures from the days around the decision are any guide.
The FOMC left its target range at 3.75%-4% on Wednesday, October 28, in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting for a quarter-point increase. The statement itself carried a hard line on prices: “Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal.” (Fed statement)
Bitcoin barely moved on the news. It rose toward $81,000, fell back, and on October 29 slid under $80,000, the level several market desks had flagged as the support to watch. A clean break below it, traders said before the decision, would expose the next floor. Bitcoin sits about a third below its October 2025 record near $126,000.
The timing points away from the Fed alone
The timing points away from the Fed alone. Binance’s preliminary estimate put the impact of its security incident at about $6 billion, with roughly $3 billion frozen on-chain, and CoinGlass data showed $1.53 billion in rolling 24-hour liquidations, about $1.29 billion of it long positions. Those figures are estimates and subject to revision. Whether the selling was mainly derivatives-driven or spot-driven is unclear.
There is precedent for how fast a policy-driven move can unwind: about $481 million in crypto positions were liquidated within 24 hours after Fed Chair Kevin Warsh’s Jackson Hole speech in August. But a shock to a major exchange hits the market through a different channel, forcing borrowed-fund positions to close as prices fall, and the closed positions push prices lower still.
Institutional buyers did not flinch before the decision. Spot bitcoin ETFs drew $110 million in net inflows on October 26 and $176 million on October 27, as the hot September CPI print had already revived hike odds earlier in the month.
The FOMC meets next on December 8-9, with markets pricing a quarter-point hike at well above 70% odds.
