Fed Cuts Rates, But BTC Still Dips Below $90K - What’s Really Driving Crypto Markets?

The Federal Reserve finally pulled the trigger. A rate cut was supposed to be the rocket fuel for risk assets—especially Bitcoin. So why did the price just slide back under $90,000?

The Contradiction in Plain Sight

On paper, it makes perfect sense. Cheaper money flows into higher-yielding, speculative bets. Crypto should be a prime beneficiary. Yet the market's reaction tells a different story—one where traditional macro signals get a shrug from the digital asset crowd. It's almost as if crypto has its own economic rulebook, one that Wall Street analysts are still struggling to translate.

Beyond the Headline Numbers

Forget the Fed's dot plot for a second. The real action is happening in the shadows: on-chain flows, derivatives positioning, and the relentless churn of decentralized finance protocols. While traders on CNBC debate basis points, crypto whales are moving billions through cross-chain bridges, chasing the next narrative or yield farm. The dip below $90K might look like weakness to some—to others, it's just another liquidity grab before the next leg up.

A cynical take? Maybe the market's just bored of central bank theatrics. After all, when you're building a parallel financial system, why get excited about a quarter-point adjustment in a dying model? The Fed giveth, and the Fed taketh away—but crypto's playing a different game entirely.

In brief

• The Federal Reserve has proceeded with a third consecutive rate cut, totaling a 0.75 % reduction since September.
• This decision, although widely anticipated, triggered an immediate Bitcoin rebound, which briefly reached $93,500.
• The initial rebound quickly faded: Bitcoin fell back below $90,000, erasing the week’s gains.
• The scenario of a prolonged rally remains uncertain, with the market split between hope for recovery and caution towards the Fed.

A crypto rebound aligned with the Fed’s mechanics

The Fed confirmed on Wednesday a third rate cut in three months, bringing the total reductions to 0.75 % since September.

This decision, although anticipated, immediately triggered a reaction on the crypto market. bitcoin went from under $90,000 to a peak of $93,500 on Coinbase, before slightly retreating to $92,300.

According to Santiment’s analysis, this dynamic fits a well-known pattern. “Each rate cut has led to short-term sell-offs, following the classic buy the rumor, sell the news pattern,” the on-chain firm states.

However, this behavior is only temporary. Santiment explains : “there is usually a rebound once the dust has settled,” adding that this stabilization phase “can offer predictable trading opportunities.”

This phenomenon fits into an overall economic logic, regularly observed after Fed decisions. Here are the key elements highlighted by analysts :

• Rate cuts encourage increased risk appetite due to lower financing costs ;

• Investors seek higher yields, pushing them toward speculative assets like cryptos ;

• Each rate cut was followed by a short-term pullback, then a more moderate but predictable rebound, according to historical data analyzed by Santiment ;

• The bitcoin uptrend remains fragile but could enter a consolidation cycle if market sentiment stabilizes in the coming days.

Optimism called into question as bitcoin falls back below $90,000

While some observers hoped for a lasting rebound after the Fed rate cut, markets sharply reminded of their volatility.

This Friday, bitcoin fell back below $90,000, completely erasing the gains made after Wednesday’s announcement. This drop temporarily invalidates the bullish scenario anticipated by some traders and revives doubts about the strength of market sentiment.

As Jeff Ko, chief analyst at CoinEx, pointed out, the rate cut was “widely expected and already priced in.” So it was more subtle signals from the Fed, notably its DOT plot, that attracted attention. It “slightly tilted towards monetary tightening,” according to Ko, which likely cooled investor bullish enthusiasm.

Moreover, the $40 billion in short-term Treasury purchases announced by the Fed were interpreted as a technical measure rather than real monetary support. Jeff Ko emphasizes: it is not a massive stimulus plan, but “a technical maneuver designed to inject short-term liquidity to adjust short-term rates.”

Nevertheless, part of the market had seen this as a positive signal, which in the short term supported U.S. stocks… and briefly bitcoin. The fall back below $90,000 shows this perceived support was more fragile than it appeared.

In this more uncertain context, Jurrien Timmer, global macro strategy director at Fidelity Investments, calls for perspective. He acknowledges bitcoin underperformed stocks this year but sees a more reassuring underlying dynamic : “the network structure is stabilizing, and the market is becoming more mature than in previous cycles.”

If Fed signals sustain hope for monetary support, the market’s reaction highlights a more nuanced reality. The bitcoin price, subject to conflicting forces, swings between speculative resurgence and structural uncertainty, reflecting a market still searching for durable benchmarks.

Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.