Bitcoin Holds $113K as Liquidity Thins, Traders Turn Defensive Before Fed Week

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Bitcoin Holds $113K as Liquidity Thins, Traders Turn Defensive Before Fed Week The moves come ahead of a pivotal Federal Open Market Committee (FOMC) meeting on Oct. 28–29, where officials are widely expected to cut benchmark rates by 25 basis points to the 4.00%–4.25% range. By Shaurya Malwa Updated Oct 29, 2025, 7:18 a.m. Published Oct 29, 2025, 7:18 a.m. What to know : Bitcoin remained near $113,000 as traders awaited the Federal Reserve's policy decision amid tightening liquidity and a stronger dollar. The Federal Open Market Committee is expected to cut benchmark rates by 25 basis points, impacting crypto and risk markets. Analysts note that while short-term risk tolerance has dropped, crypto markets show resilience with institutional inflows and ETF demand. Bitcoin hovered near $113,000 in Asian afternoon hours Wednesday as traders positioned cautiously ahead of this week’s Federal Reserve policy decision, with fading liquidity and a stronger dollar weighing on sentiment across risk markets. The world’s largest cryptocurrency remained up 4.5% over the past week but slipped 0.7% in the past 24 hours, mirroring modest losses across major tokens. Ether ETH $ 4,027.90 traded at $4,028, down 1.4%, while Solana’s SOL and Binance’s BNB each declined about 2%. XRP held slightly higher near $2.62, extending a strong seven-day run as traders rotated into high-volume tokens. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . The moves come ahead of a pivotal Federal Open Market Committee (FOMC) meeting on Oct. 28–29, where officials are widely expected to cut benchmark rates by 25 basis points to the 4.00%–4.25% range. “The fluctuating macroeconomic backdrop is the dominant driver of this crypto cycle,” said Thomas Perfumo, global economist at Kraken. “A 25bps cut this week appears highly probable, and the market is already pricing in another by December. But the October 10 sell-off underscored how exposed crypto and risk assets remain to exogenous shocks.” Perfumo noted that the balance between institutional inflows and treasury demand has shifted, tempering near-term momentum even as longer-term capital remains sticky. “Demand from digital-asset treasuries like MicroStrategy is slowing, but ETF flows continue to skew bullish, even during drawdowns,” he said. “That resilience shows crypto’s growing foothold with traditional finance, even as short-term risk tolerance has dropped since the October liquidation event.” Beyond the Fed, traders are also watching tightening liquidity conditions. Early signs of renewed stress among U.S. regional banks and a still-uncertain global macro environment have left market depth sharply lower across centralized exchanges. “Liquidity is tightening,” said Alice Li, partner at Foresight Ventures. “Early signs of U.S. regional bank stress could push the Fed to pause QT sooner, but inflation risks keep policymakers cautious. BTC extended its drawdown and altcoins sold off broadly as CEX order-book liquidity fell to around 40% of pre-drop levels.” BNB-led names dominated relative outperformance as exchange-linked tokens stabilized following weeks of deleveraging, while speculative altcoins remained “PVP — fleeting, event-driven, and low conviction,” Li added. Despite the subdued tone, some analysts say crypto markets are stabilizing after the October 10 flush that saw nearly $1.2 billion in leveraged positions wiped out. Total crypto capitalization sits around $3.9 trillion, comfortably above key moving averages, even as sentiment remains fragile. FxPro analyst Alex Kuptsikevich noted that bitcoin’s technical setup still leans constructive: “BTC remains above both its 50-day and 200-day moving averages. The $117K–$120K area is a strong resistance zone, but the rebound from $108K support keeps the bull structure intact.” As liquidity tightens and leveraged positioning rebuilds, volatility may spike around Wednesday’s Fed announcement — especially if Powell’s tone signals slower easing. More For You OwlTing: Stablecoin Infrastructure for the Future By CoinDesk Research Oct 16, 2025 Commissioned by OwlTing Stablecoin payment volumes have grown to $19.4B year-to-date in 2025. OwlTing aims to capture this market by developing payment infrastructure that processes transactions in seconds for fractions of a cent. View Full Report More For You Ether Holds Above $4,000, Arkham Says Tom Lee's 'BitMine Is Buying the Dip' By Siamak Masnavi 54 minutes ago Repeated defenses of $4,000 and heavier trading marked the session, with price finishing near $4,023 after a quick pullback from about $4,102. What to know : Ether closed near $4,022.71, up 0.98%, after multiple defenses of $4,000. Trading activity was 35% above the seven-day average, indicating larger participation. Charts show recent sell zones around $4,050–$4,080 and $4,200, with a double-bottom forming near $4,000. 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