Fed Cuts Spark Bitcoin Rebound as Bulls Anticipate Further Gains

The cryptocurrency markets experienced a slight uptick following the US Federal Reserve's recent interest rate adjustments, leading traders to look for clearer trends. The Fed has announced three consecutive interest rate cuts totaling 0.75% from September to December, a decision that was largely anticipated. However, the market's reactions have been mixed, resulting in somewhat volatile trading conditions.

Key Takeaways

The US Federal Reserve's recent interest rate cuts led to a minor rise in cryptocurrency markets, particularly Bitcoin.
Analysts noted that much of the Fed's intention was already factored into market prices, contributing to mixed responses.
Bitcoin experienced volatility post-rate cuts, with resistance levels established between $97,000 and $108,000.
The overall market sentiment towards cryptocurrencies remains cautiously optimistic despite tepid ETF activity and an uncertain equity correlation.

Bitcoin

Federal Reserve's Actions and Market Impact

Jeff Ko, Chief Analyst at CoinEx, highlighted that much of the Fed's strategy was already reflected in market prices, while the updated dot plot hinted at a slightly more hawkish stance than some traders had hoped for. He pointed out that the Fed's $40 billion in short-term Treasury purchases aimed at easing liquidity and reducing short-term rates is not intended as a broad stimulus initiative. Consequently, the markets viewed these actions as mildly positive, leading to a rise in US stocks, which supported Bitcoin's recovery after an initial dip.

Immediate Reactions According to Santiment

Analytics firm Santiment reported that each rate cut initiated a classic "buy the rumor, sell the news" phenomenon in which initial market enthusiasm gives way to short selling.

🇺🇸 The US Fed made three strategic cuts over the past three months, resulting in an overall 0.75% decline in interest rates. 1⃣ September 17, 2025: The Fed adapted the target range to 4.00 %–4.25 % (from 4.25 %+) during the 16–17 September meeting. 2⃣ October 29, 2025: The Fed lowered the rate to... pic.twitter.com/X6DWypvq5t
— Santiment (@santimentfeed) December 11, 2025

Market Analysis

While these cuts are generally perceived as bullish for the cryptocurrency sector in the long term, they have also resulted in brief pullbacks. Santiment noted that a minor wave of Fear, Uncertainty, and Doubt (FUD) or retail selling typically indicates that the small post-cut decline is over, and a rebound may follow once market conditions stabilize.

Bitcoin displayed volatility in response to these developments. It dropped below $90,000 but quickly surged to $93,500 on Coinbase before stabilizing around $92,300 at the time of reporting. Crucial resistance levels for Bitcoin are observed between $97,000 and $108,000.

BTC/USD Chart
BTCUSD is currently trading at $92,480. Chart: TradingView

In daily charts, Bitcoin remains within a small rising channel set against a more extensive downtrend. Technical analysts noted that the MACD histogram is nearing a positive crossover, which some see as a potential signal for renewed upward momentum.

Despite this, ETF activity has been relatively subdued, with only $219 million in net inflows since late November, prompting some investors to remain cautious. The declining strength of the US dollar has also created a supporting backdrop, with the DXY index falling to 98.36, reflecting bearish momentum on its MACD.

Additionally, the Nasdaq's recovery above its 50-, 100-, and 200-day simple moving averages provided a temporary boost for risk assets, including Bitcoin. It’s noteworthy, however, that the correlation between Bitcoin and equities is inconsistent; losses in the stock market can impact Bitcoin more significantly than positive stock performance boosts it, resulting in an asymmetric risk profile for traders.