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The market is following the Federal Reserve’s move with cautious optimism.
The Fed’s recent 25 basis point rate cut on December 10 to 3.50-3.75% marks the third cut of 2025. As a result, traders are now eyeing a potential liquidity boost, causing Bitcoin [BTC] back on the radar.
But that’s not all. A key point in the Fed’s statement is that they will purchase $40 billion worth of US Treasury bonds over the next thirty days.
By doing this, the Fed injects additional short-term liquidity back into the banking system.
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Simply put, the US economy is about to experience a new wave of liquidity.
With another 25 basis point interest rate cut and $40 billion in government bond purchases from financial institutions, the Federal Reserve is clearly trying to push cheaper capital back into the system. risks on the labor market start creeping higher.
And yet, BTC has responded with a 2.14% dip, pushing the price below $90,000.
It is striking that this step is not a fluke. While the Fed is encouraging short-term liquidity, it is also raising concerns longer-term risksespecially as markets start to price in a pause on interest rate cuts heading into 2026.
Macro Volatility Puts Pressure on Bitcoin’s 2026 Rally
It seems that investors were already prepared for Bitcoin’s volatility.
By mining companies Unpleasant BlackRockmillions in BTC discharged before the FOMC. With inflation still high and the Fed divided on how aggressively to cut rates next year, investors clearly remain cautious.
And that caution is not misplaced. During the last four FOMC meetings, Bitcoin has retreated repeatedly. In fact, after October’s FOMC, BTC fell almost 30% to $80,000, marking the first major flash crash of 2025.
Source: TradingView (BTC/USDT)
Against this backdrop, the question remains: is history about to repeat itself?
A recent one Glassnode report points to weak bids around $90,000, reinforcing cautious sentiment. Add to that the aggressive selling through smart money, and Bitcoin is clearly in a supply-distortion situation, indicating possible downward pressure.
Looking ahead, BTC’s base build for a rally in the first quarter of 2026 is still uncertain. Now reshuffling investors, macrovolatility continuesand weak FOMO, Bitcoin could repeat its post-FOMC crisis and test key support levels.
Final thoughts
- The Fed’s recent moves provide liquidity in the short term, but concerns about long-term risks and a possible pause in rate cuts in 2026 are keeping investors cautious.
- Weak bids around $90,000 and aggressive selling by smart money leave Bitcoin vulnerable to a repeat of post-FOMC pullbacks, testing key support levels.