Key Takeaways
- Bitcoin rebounds despite post-Fed rate cut volatility.
- Fed rate cuts remain supportive long term.
- Technical risks still loom.
Bitcoin rebounded on Friday after slipping sharply following the U.S. Federal Reserve’s third interest rate cut in as many months, as investors weighed the long-term impact of looser monetary policy.
Following the cut, BTC rose more than 2% over the past 24 hours to trade around $92,291 at the time of reporting, recovering from a brief dip below the $90,000 mark.
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Fed Rate Cuts
The Federal Reserve has reduced interest rates by a total of 75 basis points over the past three months, a move widely viewed as supportive for risk assets over the long term.
The first Fed rate cut came on Sept. 17, when the Fed lowered its target range to 4.00%–4.25% at its September meeting.
This was followed by a second cut on Oct. 29, bringing the range down to 3.75%–4.00%.
Most recently, on Dec. 10, the Fed reduced rates again to 3.50%–3.75%.
According to market intelligence platform Santiment, each of the three Fed rate cuts triggered a short-term “buy the rumor, sell the news” reaction in Bitcoin and crypto markets.
Santiment noted that such pullbacks are often followed by a rebound once volatility subsides, adding that signs of mild sell-offs can sometimes signal that post-announcement declines are nearing an end.
“Thus far, this latest rate cut has been no different,” it wrote.
Bitcoin Price Action After the Latest Cut
Bitcoin fell more than 3% on Thursday following the Fed’s December rate decision, briefly slipping below $90,000 before stabilizing around $90,025.
The decline occurred despite strong inflows into U.S. spot Bitcoin exchange-traded funds throughout the week.
However, Bitcoin later rebounded, climbing more than 2% over the past 24 hours to around $92,291, as buyers stepped back into the market.
Technical Warnings From Analysts
Some analysts cautioned that the rebound may be temporary.
Valdrin Tahiri, an analyst at CCN, said the broader crypto market is showing signs of a potential final leg lower based on Elliott Wave analysis.
According to Tahiri, the total crypto market capitalization has completed a five-wave downward structure from its all-time high in October, with the market potentially having just finished wave four.
“If TOTALCAP loses the channel support, the next leg down could be steep, confirming that wave five has begun,” he wrote.
This could trigger another decline in the crypto market of between 17% and 29%, he said.
Tahiri added that traders should closely monitor the channel’s lower boundary, as it will determine whether the current pullback remains a short-term dip or develops into a deeper market breakdown.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
