Asia Market Update: Bitcoin Stabilizes at $90k Amid Fed Rate Cut Fears

Bitcoin

Bitcoin is maintaining a price of around $90,000 as Asian equity markets face declines. This dip in stocks comes as traders express uncertainty regarding the Federal Reserve's future rate cuts after an anticipated announcement this week.

Key Takeaways:

Bitcoin is trading at $90,227, down 0.8%, while Asian stocks are slipping.
The Federal Reserve is expected to announce a 25 basis-point rate cut, but uncertainty looms over future rate adjustments.
The crypto market capitalization stands at $3.16 trillion, reflecting a slight decrease of 0.8%.
In light of Fed policy, traders are adjusting their expectations regarding future rate cuts, impacting cryptocurrency values.

Market Overview

Bitcoin is currently priced at $90,227, experiencing a 0.8% decrease. Ether is at $3,109, up 0.3%, and XRP stands at $2.07, reflecting a 0.1% increase. The total market cap for cryptocurrencies is $3.16 trillion, marking a drop of 0.8%.

Traders Adjust Expectations Amid Fed Uncertainty

The Federal Reserve is set to meet on Wednesday and is widely expected to implement a 25 basis-point rate cut, a move that traders have viewed as almost certain. However, the focus is now shifting to what comes next, as investors are increasingly wary that policymakers will indicate a "slower pace" of future easing.

High inflation and a scarcity of new economic data due to the government shutdown have contributed to differing opinions within the Fed, according to various analysts and investors.

After this week’s anticipated cut, money markets now suggest only two further rate adjustments by the end of 2026. This is a reduction from the three cuts that were previously expected just a week ago, a change that holds significance for Bitcoin and other cryptocurrencies that are sensitive to global liquidity conditions.

In the bond market, the US 10-year Treasury yield reached its highest point since September during Monday's trading, exacerbating the selling pressure in Europe and Japan and bolstering the dollar. Increased long-term yields generally tighten financial conditions, which can limit risk appetite, even as discussions of rate cuts continue.

Mixed Market Sentiment Ahead of December Rate Adjustments

Main indexes on Wall Street ended lower on Monday, with the majority of S&P 500 sectors closing in the negative as Treasury yields rose. Optimism for a potential rate cut in December strengthened after last week’s data indicated a modest rise in consumer spending as the third quarter came to a close. Nevertheless, investors seek clearer signals regarding future Fed policy from what is perceived as the most "divided Fed" seen in years.

Derivatives pricing reflects this uncertainty, with traders currently assigning an approximately 89% probability for a 25 basis-point rate cut on Wednesday and have reduced expectations for subsequent easing.

For the crypto market, any unexpected announcements or comments during the Fed's press conference could swiftly result in significant price movements around the $90,000 mark.

Influences on Asian Equities and Crypto From U.S. and China Policies

While Chinese markets remained relatively quiet, the top leaders in Beijing have prioritized "domestic demand" as their primary economic focus for 2026, signaling a cautious approach to stimulus measures. Confidence that China can stabilize its growth without aggressive easing could significantly affect regional risk appetite, subsequently impacting Asian equities and the cryptocurrency market.

Monetary policy discussions remain crucial. Kevin Hassett, a potential candidate for the next Fed chair, stated it would be reckless for the Fed to outline a fixed plan concerning interest rates over the next six months.

The director of the White House National Economic Council emphasized the importance of monitoring economic data, suggesting that future decisions will likely be made on a meeting-by-meeting basis rather than following a pre-defined easing path.

Looking forward, the next few days are expected to be critical for crypto traders. Greg Magadini, director of derivatives at Amberdata, mentioned that the upcoming week will be heavily influenced by the FOMC rate decision. He believes a -25bps cut could set the stage for an end-of-year rally in cryptocurrencies and other risk assets.

He added that Donald Trump is anticipated to announce his selection for Fed chair early in 2026, with Senate approval expected to follow, allowing the new chair to take office in May 2026 after Powell's term concludes.

This expected transition, along with the Fed's decision this week, is already impacting long-term positioning in Bitcoin and the broader digital asset market, as prices hover near $90,000 for the time being.