The Fed has lowered interest rates. Market reaction of cryptocurrency inverse to expected

Today, the United States Federal Reserve (FED) decided to cut interest rates by 25 basis points, setting their range at 3.5%–3.75%. This was the third consecutive reduction this year, following cuts in September and October. This decision was widely expected by the market, with a probability exceeding 90%. Analysts predicted lower interest rates would increase market liquidity, stimulate appetite for risk and lead to higher prices of high risk assets, including cryptocurrency.

Market expectations: Bulls Screenplay for Cryptovalut

Traditionally, Fed interest rate cuts are seen as a catalyst for growth in cryptocurrency markets. Lower loan costs encourage investors to invest capital in higher risk assets such as Bitcoin (BTC) and Ethereum (ETH). In the past, similar decisions led to price rallies – for example, after the September fall, Bitcoin recorded short-term profits.

Before announcing the decision, Bitcoin even approached the level of US$95 000, driven by speculation and additional factors such as Fed's injection of US$13,5 billion into the market. The cryptocurrency community on platforms such as X (formerly Twitter) was optimistic – posts talked about "mega bull" conditions, with forecasts of adding $1.5 billion liquidity to the market. Analysts predicted that CryptoThey'll react to increased fluidity as soon as possible.

Unexpected Reaction: Deductions Instead of Growth

Despite these expectations, the cryptocurrency market reaction after the announcement of the decision Fed turned out to be the opposite. Bitcoin, instead of continuing the rally, fell below US$93,500. BTC price dropped to the level from January 2025, erasing all this year's profits.

The tone of the Fed message proved to be a key factor. Despite the reduction, President Jerome Powell suggested a potential pause in further cuts in January 2026, due to persistent inflation and cooling of the labour market. This split position in the Open Market Committee (FOMC) – with votes for greater cuts or maintaining status quo – has caused uncertainty. As one analyst noted on X: "People treat foot reductions as bull events, while they often signal that something is breaking down. In such a regime crypto is sold first".

Causes of Reverse Reaction

Several factors contributed to this unexpected dynamics:

• Pause further cuts of the feet: The expected reduction was already at prices, but the signals at a slower rate of further cuts caused an increase in expectations of economic growth.
• Sensitivity to Macro: The cryptovaluts have become more correlated with traditional markets. In 2025, Bitcoin followed the mood on the stock market, responding to concerns about tariffs, interest rates and an AI bubble.
• Internal Market Problems Krypton: Despite institutional interest (e.g. Vanguard opening access to cryptic ETFs), the market has experienced internal shocks, such as mass removals of positions.
• Global Influences: Additional pressures such as the Japanese Bank policy or Chinese ban on cryptocurrency trading have weakened the reflection.

Conclusions and Perspectives for the Future

The Fed decision of December 10, 2025 highlights the growing link between cryptocurrency market and macro-economics. Although the foot reductions historically supported growth, this time it turned out differently. Analysts warn that Bitcoin can end a year under $100,000, but long-term adoption progress – such as new regulations or institutional investments – can reverse the trend.