Bitcoin’s Fed rate cut echoes: Will history repeat BTC’s $108K crash?

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Key Takeaways

What happened to Bitcoin during the 2024 cycle top?

Ah, the unforgettable drama of December 2024! The Federal Reserve, with all the subtlety of a clumsy elephant, slashed rates, and Bitcoin, ever the drama queen, surged to a staggering $108k. Only to promptly tumble by a meager 20% as Short-Term Holders (STHs) made a hasty exit, abandoning their once-prized possessions like they were cursed antiques.

Could a similar scenario unfold now?

Bitcoin Derivatives are overheating like a summer day in the Sahara, and traders are stacking massive long clusters, making a remarkable imitation of 2024’s setup. Because, who doesn’t love a good déjà vu?

Bitcoin [BTC], currently swanning about near $115k, is perched delicately at a key inflection point-because, naturally, the market can never make up its mind. The Fear & Greed Index, sitting comfortably at 50, is sending out vibes of profound indecision. Just like me when I have to choose between pizza or pasta. 🥖🍝

Everyone’s waiting with bated breath for the Federal Reserve to declare the next great market direction. Meanwhile, history, in all its infinite wisdom, is whispering some tantalizing clues.

Fed cuts and echoes from 2024

The last great rate cut, which occurred on December 18th, 2024, arrived just as Bitcoin was riding the post-election bull run. Yet, instead of gracefully continuing its climb, Bitcoin decided to cap its party at $108k. Such dramatic flair, don’t you think?

And what followed? A magnificent 20% drop over 12 weeks-a journey through bearish terrain so steep it almost made you reconsider your life choices. And, of course, the Short-Term Holder NUPL (Net Unrealized Profit/Loss) plummeted from a blissful 0.20 to a melancholy -0.13. First time in over a year. A veritable catastrophe!

In simpler terms, STHs capitulated. That is, they threw in the towel, signaling the grand finale of their bullish fervor. 🏳️‍🌈

And wouldn’t you know it? The STH NUPL is still lingering near the red zone-such a beautiful spot for a dramatic reveal. For context, this metric measures STHs’ unrealized profits or losses. It’s like checking your bank balance, only to realize you’ve been spending on fancy lattes for weeks.

Once the NUPL flips red, it usually signals that the heartbroken traders will dump their precious Bitcoin, hastening a sharp downward plunge. Currently, the STH Realized Price is hovering around $110k. That’s the breakeven line. If BTC slips below that, prepare for a flood of desperate sales as STHs try to save face. The odds? Well, they’re rising like a freshly baked soufflé.

Bitcoin Derivatives flash overheated positioning

Ah, the world of Bitcoin Derivatives-where volume seems to be expanding at a rate only rivaled by the universe itself. On September 15th, Derivatives reached a jaw-dropping $242 billion, leaving spot trading in the dust with a humble $25 billion. Traders, with all the discretion of a toddler in a candy store, have been stacking leverage aggressively.

Interestingly, this mirrors the wild dance we saw during the last Fed rate cut. Bitcoin’s Open Interest (OI) hit an all-time high of $72.44 billion on December 18th, 2024, at the precise moment Bitcoin was at its $108k peak. The aftermath? Liquidations, darling. Liquidations galore!

For those who thrive on chaos, Binance’s 24H Heatmap is a delight, showcasing a massive long liquidity cluster around $113,652. A truly delicious display of excess.

This, my friends, could set the stage for another dramatic blow-off top, akin to the thrilling peak of 2024. With STHs at breakeven, derivatives burning hot, and liquidity clustering like a group of overeager fans at a concert, a forced long squeeze could be the opening act before any breakout attempt. Hold on to your hats! 🎩

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2025-09-16 19:29