16 Oct 2025
The Federal Reserve cut interest rates by 25 basis points as expected, leading to a largely neutral market reaction, while Bitcoin confirmed a new short-term warning signal and wiped out significant liquidity. Consequently, an adjustment was made to a Bitcoin long position, as Ethereum, Solana, XRP, and Chain Link exhibit various short-term support and resistance levels amid evolving market dynamics.
The Federal Reserve cut interest rates by 25 basis points, an expected outcome that was largely priced into the market, resulting in a neutral overall impact. This action marks the resumption of interest rate cuts for the first time since the end of last year.
Bitcoin confirmed a new short-term warning signal, as a bearish divergence has been established on the 4-hour chart, indicating a potential cool-off or slight pullback over the next couple of days. The price also struggled at the $117,000 resistance level, after liquidity at this point was wiped out.
A Bitcoin long position on a BTEX account was reduced due to the new bearish divergence and price struggling at key resistance, though an overall long position is maintained with stop losses placed to secure profits from both positions.
Bitcoin faces strong resistance at $117,000, with a breakout above this level targeting $120,000 and subsequently all-time highs. Key support levels are identified at $114.5K, $113K-$113.5K, $110K, and a major zone between $106.7K and $107.6K.
The weekly Bitcoin chart's super trend indicator remains green, suggesting a larger bull market, while a bearish divergence persists. On the 3-day chart, a bullish crossover in the MACD is nearing confirmation, and the 4-hour chart confirmed a bearish divergence.
Liquidity at roughly $117,000 was wiped out, with some remaining closer to $118,000, though the bearish divergence is expected to play out first before higher liquidity targets are considered.
The Bitcoin dominance chart shows sideways consolidation on the 3-day time frame, with a small bullish divergence potentially leading to sideways movement or slight bullish relief. This behavior implies altcoins will likely perform similarly to or slightly worse than Bitcoin.
Ethereum is consolidating sideways within a range on the 3-day chart, with support between $3.9K-$4.1K and resistance between $4.8K-$4.9K. Short-term support on the 4-hour chart is found at $4470-$4.5K, with a break below potentially leading to a retest of $4250-$4280.
Solana maintains a long-term bullish trend on the 2-day chart, retesting a key Fibonacci level at $230. Resistance levels are at $260-$265 and $290-$300, while support is at $230, $215, and a major area of $190-$200.
XRP is currently in a sideways price range, lacking momentum, and shows a potential inverse head and shoulders pattern forming on the daily chart. Key support is at $2.85-$2.90 and $2.75, with resistance at $3.10 and $3.30-$3.40. A previously observed descending triangle bullish breakout is losing momentum.
Chain Link is in a long-term bullish trend but faces a potential bearish price structure if it breaks below the $22 support. Holding above $22-$22.40 is crucial, otherwise, the price could target $20 or $19-$20. Resistance is at $25.20 and $26.70-$27.
A general cool-off, slight pullback, or choppy sideways price action is expected for Bitcoin and altcoins over the next couple of days, primarily influenced by Bitcoin's confirmed bearish divergence.
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A bearish divergence ultimately causes a lot of weakness and a lack in bullish momentum following the bearish divergence.
| Asset | Type of Insight | Key Level | Observation/Action |
|---|---|---|---|
| Federal Reserve | Monetary Policy | 25 basis points | Interest rate cut by 0.25%, an expected and priced-in event with a neutral market impact. |
| Bitcoin | Short-Term Signal | 4-hour chart | Confirmed bearish divergence, suggesting a lack of bullish momentum and potential cool-off or pullback for a few days. |
| Bitcoin | Resistance | $117,000 | Price struggles and rejects from this strong resistance; a daily candle close above this level is crucial for further upside. |
| Bitcoin | Major Support | $106.7K - $107.6K | Identified as a significant support area in the event of a deeper pullback. |
| Bitcoin | Liquidation Event | $117,000 | Liquidity to the upside was wiped out at this level; some liquidity remains at $118,000. |
| Ethereum | Sideways Consolidation | $3.9K-$4.1K (support), $4.8K-$4.9K (resistance) | Price continues to bounce within this established sideways range for weeks. |
| Solana | Key Fibonacci Support | $230 | Retesting and holding above this level, maintaining a long-term bullish trend. |
| XRP | Momentum & Pattern | Daily chart | Lacking momentum and currently in a sideways range; a potential inverse head and shoulders pattern is forming but not yet confirmed. |
| Chain Link | Critical Support Zone | $22 - $22.40 | Holding above this low is essential for bulls to prevent the formation of significant bearish price structure. |
| Overall Crypto Market | Short-Term Outlook | Next couple of days | Anticipate a cool-off, slight pullback, or choppy sideways price action, influenced by Bitcoin's bearish divergence. |
