BTC Drops Below $90,000: Rate Cut Realized Equals Exhausted Positive News
Fed Chair Powell announced a 25-basis-point rate reduction, bringing the benchmark rate to 3.50%-3.75%, marking the third consecutive cut this year. However, the dot plot revealed significant internal divergence, with seven officials dissenting—six preferring no cut. The median rate projection remained unchanged from September, signaling a likely slowdown in future easing, with only one cut anticipated in 2025 and 2026 each.
This mixed, cautious signal failed to boost market confidence. Bitcoin fell below $90,000, Ethereum dropped under $3,200, and Solana declined beneath $130. Most crypto sectors saw losses, with over $468 million in liquidations—$331 million from long positions.
Analysts attribute the downturn to year-end liquidity constraints and subdued sentiment. Greeks.live noted that despite the Fed’s dovish move, low holiday liquidity limits bullish momentum. ING expects two 2026 rate cuts if inflation nears 2%, while Goldman Sachs views further easing as contingent on weaker labor data.
Short-term, the market is expected to remain defensive amid thin liquidity. Longer-term, the focus shifts to labor market performance—should data weaken, more aggressive rate cuts may follow. Until macro conditions clear and liquidity returns, cautious positioning is advised.
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