Bitcoin lost some gains after the Federal Reserve held rates steady as widely expected, retreated from the $90,000 mark after clawing it back for the first time since last Friday, and fell below $88,000.
The world’s largest cryptocurrency by market cap fell 1.2% over the past 24 hours to trade at $87,862 as of 3:53 a.m. EST, with trading activity and volume up 13% to $49.7 billion.
The decline came amid a 1.1% decline crypto market cap to $3.06 trillion.
As a result of the sudden move, total liquidations totaled $345.63 million, while BTC longs totaled $112.36 million, according to Mint glass facts.
Fed pauses rate cuts
The US Federal Reserve left interest rates unchanged this month, maintaining them at 3.50%-3.75% after the latest Fed meeting, which ended on Wednesday. In December, the Fed cut rates by 25 basis points.
Fed officials advised a wait-and-see approach given persistent inflation and a tight labor market. In most cases, higher interest rates increase the opportunity cost of holding yield-bearing assets such as U.S. Treasury bonds.
🚨The Fed pauses interest rate cuts for the first time since mid-2025.
Inflation is still high, uncertainty is high and the easing cycle is likely nearing an end. pic.twitter.com/HtM1Py2flg
— Wall Street Gold (@WSBGold) January 28, 2026
This in turn reduces the appeal of risky assets like Bitcoin and stocks, which seems to be the case over the past 24 hours.
On the other hand, lower interest rates generally support non-yielding assets like Bitcoin by lowering the opportunity cost of holding them.
For example, futures contracts for the S&P 500 Index fell as much as 0.52% on January 29, mirroring Bitcoin’s decline on the same day.
Geopolitics is adding to the risky mood as investors turn to safe-haven assets
Tensions between the US and Iran escalated this week after US President Donald Trump told Tehran that time was running out and that a massive armada was moving quickly towards the country “with great force, enthusiasm and determination”.
Trump said: “Hopefully Iran will soon ‘come to the table’ and negotiate a fair and just deal – NO NUCLEAR WEAPONS – a deal that is good for all parties. Time is running out, it really is essential!”
It was the clearest indication yet from Trump that he plans to launch a military strike soon if Iran refuses to negotiate a deal on the future of its nuclear program.
Bitcoin price is still in an indecisive phase
After hitting an all-time high of $126,200 in early October, the Bitcoin price fell into a sustained decline and reached the long-term support area around $80,629. This level then became an area of strong demand, driving the price to a recovery around the $95,500 level.
This area now acts as a strong barrier to the uptrend and serves as a buffer against downward pressure, with BTC price now held within a sideways pattern.
After reaching resistance at $97,808 on January 14, Bitcoin retreated, with the Fibonacci level of 0.618 ($86,803) now providing support.
The recent decline has pushed the price of BTC below the 50-day Simple Moving Average (SMA), which supports the current bearish outlook, but still above the current support area.
Additionally, the Relative Strength Index (RSI) traded between 37 and 47, indicating continued indecision among investors.
BTC price at a critical moment
Bitcoin appears to be at a critical juncture, with price action consolidating within limits after a sharp corrective move.
The market is currently above a key demand area near lower range support, indicating that buyers are still defending this zone despite current bearish pressure. If BTC can stabilize above the 88,000-89,000 region and regain near-term resistance, a relief towards the 93,000-95,000 region becomes increasingly likely as sellers lose momentum.
Conversely, the inability to hold current support would weaken the consolidation structure and increase the likelihood of continuation to lower support levels near the lows from the previous range.
In this case, if BTC falls below the 0.618 Fib level, the next possible support is at the 0.786 Fib level around $84,302, followed by the $80,629 level.
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