Bitcoin Drops Below $108 or Bitcoin Falls Below $108

Bitcoin’s Price Drop Below $108,000 and Expectations for the Fed

On May 28, 2025, Bitcoin’s price dipped below $108,000, closing the day near $109,000, according to TradingView data. This fluctuation represents a significant movement in the cryptocurrency’s value.

Bitcoin’s drop on May 28 occurred amid caution in risk markets. This was due to shifting expectations regarding the U.S. Federal Reserve’s (Fed) decisions, as reported by Cointelegraph. The cryptocurrency’s price retreated as projections for Fed interest rate cuts dissipated. This situation pushed Bitcoin below $108,000 at the start of Wall Street trading. A higher interest rate environment can reduce the attractiveness of risk assets like Bitcoin.

The CME Group’s FedWatch Tool showed a reduction in the probabilities of rate cuts. This indicator is crucial for the crypto asset market and other risk assets, as Fed decisions directly impact liquidity and risk appetite.

Compared to its last peak, Bitcoin had reached $111,740.87 on May 21, 2025, driven by institutional demand. The drop to the May 28 close, at $108,976.8, represents a decrease of approximately 2.47% from that recent high.

“These projections do not constitute financial advice.”

What Role Did the Federal Reserve Play?

On May 28, 2025, expectations regarding the Fed’s monetary policy likely influenced Bitcoin’s price drop below $108,000, according to Cointelegraph. “Prior to the Federal Reserve’s May meeting minutes, the sentiment among risk assets was cautious,” the report states.

The CME Group’s FedWatch Tool also reflected this trend, showing a reduced probability of a rate cut for September 2025. Cointelegraph highlighted this information as a crucial conditioning factor for the cryptocurrency market. Additionally, the prediction service Kalshi adjusted its rate cut projections for 2025 from four to just two. This revision intensified the bearish pressure on Bitcoin’s price, adding to overall market concern.

How Interest Rates Impact Bitcoin

Interest rate hikes by the Fed typically exert downward pressure on risk assets like Bitcoin. An increase in rates raises the cost of borrowing, making non-yielding assets like cryptocurrencies less attractive compared to safer investments, such as bonds. This can lead to a reallocation of capital by investors, contributing to price declines, according to Coinbase analysis.

In contrast, interest rate cuts usually benefit the cryptocurrency market. When the Fed lowers rates, borrowing costs decrease, increasing liquidity in the markets. This scenario attracts investors seeking higher returns in a low-rate environment, boosting interest and the value of Bitcoin and other crypto assets.

The Fed’s decisions are interpreted by markets as crucial signals of risk or confidence, given their significant influence on the economy. Investors anticipate and react to the Fed’s potential future actions, based on its statements and economic analyses. Adjustments in interest rates and other monetary policies have the power to generate substantial changes across entire markets, as well as influencing inflation levels, for example, as Cointelegraph has noted.

“For example, if investors expect the Fed to increase interest rates, this can lead to a stronger dollar, as dollar-denominated assets become more attractive. Similarly, if a more relaxed monetary policy is expected, there could be an opposite effect, which would benefit investments in risk assets,” highlights the Cointelegraph article.

Market Sentiment and Key Metrics

According to Cointelegraph’s analysis, Bitcoin shows strong support between $96,000 and $104,000. Although the price could return to $100,000 in the coming days, data suggests that extended trading below this threshold would be limited.

A crucial factor for an effective rebound, should Bitcoin drop below $100,000, is the short-term realized price at $96,000. This level would act as a “cushion” to attract buyers and contain the price drop.

Cointelegraph quotes Altcoin Sherpa, who stated: “Crypto trader Altcoin Sherpa suggested that current market conditions are primed for a price recovery in the coming days. Highlighting a key support zone between $102,000 and $104,500, where BTC previously consolidated before moving higher, the trader anticipates a bounce that could push Bitcoin above $107,000 within the next week.”

Read here: Bitcoin drop to $100K likely, but futures market reset means dips won’t last long

Bitcoin Market Sentiment and Activity Analysis

The Crypto Fear & Greed Index showed “Greed” readings with values of 74 on May 28, 2025, 60 on May 29, and 50 on May 30. Cointelegraph reported on May 30 that current Bitcoin metrics reflect moderate and contained profit-taking.

This profit-taking is significantly less than what was observed in previous cycle peaks, indicating that the market isn’t overheated and its upward trajectory still has room. Concurrently, a $3.7 billion reduction in Bitcoin futures open interest, following the drop from $108,000 to $104,500, suggests a “healthy reset” for the market. This liquidation of overleveraged positions and the reduction in euphoria could pave the way for a Bitcoin rebound and greater stability.

Possible Correction if Economic Uncertainty Persists

The identification of a “bear flag” on Bitcoin charts suggests the possibility that a deeper correction could extend until mid-June. In a more critical scenario, the non-sustainability of key support levels could lead to more pronounced price declines.

Despite this, Cointelegraph reports that large investors, known as “whales,” have continued accumulating Bitcoin while awaiting its price consolidation above $100,000. An additional Cointelegraph article from June 03, 2025, projects a more optimistic forecast, highlighting the role of U.S. fiscal and governmental policies.

It’s suggested that a general decrease in market uncertainty could lead to a sustained Bitcoin rally. However, the inherent volatility of the cryptocurrency market and its particular susceptibility to the Fed’s response to inflation are emphasized.

What Analysts Are Saying and How to Prepare

A Cointelegraph analysis from June 3 indicates that Bitcoin’s price shows liquidity near $106,000, with bulls defending that level with a $260 million bid. Traders anticipate a steady recovery, supported by strong support at $97,000, which would contribute to price stability. CoinGlass data suggests that price volatility could continue as it seeks the nearest liquidity.

Meanwhile, Glassnode, an on-chain analytics firm, highlights the particular nature of current returns. Despite the observed profit-taking, its intensity is lower compared to previous cycle peaks. This containment suggests that the market isn’t excessively overheated, which could indicate room for Bitcoin’s future growth.

Bitcoin’s short-term outlook is closely tied to the future monetary policy decisions of key institutions like the Fed and the European Central Bank (ECB). In early May 2025, Cointelegraph reported that Bitcoin was approaching $98,000 despite “pessimistic” forecasts regarding Fed rate cuts, which directly impacted its price. Subsequently, it has been confirmed that the Fed’s response to inflation is a decisive factor for the cryptocurrency ecosystem. These macroeconomic decisions are closely watched, as they can significantly influence the behavior of the digital asset market.

For users and investors, prudent risk management is fundamental in the volatile cryptocurrency market. While digital assets offer growth and diversification potential, it’s advisable that they constitute only a small portion of the overall portfolio, tailored to a high-risk tolerance.

A focus on diversification is crucial, and tools like cryptocurrency exchange-traded funds (ETFs) and index funds can offer a more resilient portfolio. Adopting a long-term view is essential to navigate through periods of high volatility and maximize opportunities in this market.

Conclusion: What the Average User Can Expect

Bitcoin’s recent drop to $108,000 aligns with its historical pattern of high volatility, a well-known characteristic of the digital asset. Market analysts, in Cointelegraph reports throughout 2025, have highlighted these significant fluctuations, both upward and downward, as an inherent part of its development. This suggests that price variations are a natural phase for a maturing and adopting asset, without implying a value judgment on its status.

Within the cryptocurrency ecosystem, these price corrections are considered common and essential for market dynamics. Experts interpret them as “normal cycle pullbacks” that help to “cool down” a potentially overheated market. Cointelegraph notes that these declines favor a “healthy market reset,” facilitating position liquidations and fostering a more stable environment.