Bitcoin surged past $94,000 before swiftly falling back as Fed Chair Jerome Powell conveyed mixed signals following the central bank’s 25 basis-point rate cut on Wednesday.
Trading around $92,000 for most of the day, BTC jumped to $94,400 after Powell, in his post-meeting address, highlighted the potential risks of a weaker labor market, but gave back much of the gains when he indicated that the fight against persistent inflation is ongoing.
Currently, BTC is trading at $93,500, reflecting a 0.5% increase over the last 24 hours. Ether continued its recent pattern of strength, trading above $3,400 and rising approximately 2.4% over the same timeframe.
According to Powell in his post-meeting remarks, Fed policy is now “within a range of plausible estimates of neutral, and positions us well to determine the extent and timing of any further adjustments.”
“We’re well positioned to wait and see [regarding additional rate cuts],” he stressed.
Powell recognized that there will be “a great deal of data” before the Fed’s next meeting in January that will shape the central bank’s future actions.
In conjunction with the Fed’s decision to lower its fed funds rate range by 25 basis points, the New York Fed announced it will initiate purchases of short-term Treasury bills and Treasury securities with remaining maturities of up to 3 years, targeting around $40 billion in purchases over the next month starting Friday— a move aimed at alleviating financial conditions without indicating the start of a comprehensive quantitative easing cycle.
Powell indicated that purchases will remain “elevated” for several months.
This marks a significant shift from the previous three years of the central bank’s balance sheet reduction following the rapid growth during the pandemic period.
Analyst Insights
“The Fed made it clear that this cut does not signify the beginning of an aggressive easing cycle. The future direction will rely heavily on incoming inflation and labor-market data,” said Daniela Hathorn, senior market analyst at brokerage Capital.com, in a note.
“While policymakers acknowledged the necessity for modest easing amidst inconsistent post-shutdown data and indications of decelerating momentum, the updated messaging underscored caution,” she added.
“The fact that two FOMC members advocated for no change in rates illustrates that this was a narrow decision, influenced by incomplete data,” noted Brian Coulton, chief economist at Fitch Ratings. The fairly moderate increase in core inflation in recent months likely influenced the committee’s belief that another cut — while maintaining rates slightly above neutral — was warranted.
“It appears improbable that rates will continue to decline in subsequent meetings. We now anticipate only two additional cuts by June 2026, bringing the Fed Funds rate to 3.25% (upper band),” he stated.
“In balancing between indicating a rate cut pause and restarting Fed purchases of U.S. Treasuries, Powell is navigating the delicate line between their two mandates,” observed David Hernandez, a crypto investment specialist at 21Shares.
For Bitcoin to surpass its current trading range, Hernandez mentioned that it must gain fresh momentum to “overcome the concentrated short pressure” at the $94,500 resistance zone, precisely where Wednesday’s price spike faced a ceiling.
“If spot ETF inflows strengthen as anticipated now that the cost of capital is declining, that could ignite the momentum needed to push Bitcoin back above the psychologically significant $100,000 mark,” he concluded.
