Despite the lack of economic data, the Fed yesterday evening cut interest rates by 25 basis points, in line with market expectations.
However, despite the interest rate cut, Bitcoin (BTC) showed a weak trend, briefly falling below the $90,000 level compared to the Binance Tether (USDT) market.
Bitcoin attempted a short-term recovery immediately following the US interest rate cut announcement, but volatility increased afterwards, and it failed to hold stably above the $90,000 level.
The reason for the decline in Bitcoin likely lies in the messages from the Fed and its chairman, Jerome Powell. These messages increased uncertainty regarding 2026, diminishing investor enthusiasm for future easing policies.
Additionally, the fact that the Fed only proposed one more rate cut in 2026, thus dashing expectations of two to three rate cuts, was also among the reasons for the decline.
Speaking to Coindesk, Greg Magadini, Amberdata's director of derivatives, said, “The Fed is divided, and the market has no real prediction of the future trajectory of interest rates until May 2026, when Chairman Jerome Powell is expected to leave office. A Trump loyalist (who would aggressively try to lower interest rates) replacing Powell would likely be the most reliable signal for interest rates. But that's still six months away.”
Shiliang Tang, managing partner at Monarq Asset Management, commented on the Bitcoin decline, saying that BTC was moving downwards, following the stock market.
Tang stated, “Bitcoin and cryptocurrency markets initially showed an upward trend following the news of a rate cut from the Fed, but have since steadily declined in parallel with stock market futures, and BTC tested the local peak of $94,000 for the third time in two weeks but failed to break through.”
*This is not investment advice.
