Crypto markets pulled back as traders unwound positions after a brief bounce following the Federal Reserve’s rate cut.
Summary
– Crypto markets slipped with liquidations topping $500 million and sentiment stuck in fear.
– The Fed’s widely expected 25-basis-point cut, Powell’s cautious tone and rising global yields led to a sell-the-news pullback.
– Analysts see key Bitcoin support around $88,000–$84,000; Standard Chartered cut its year-end target to $100,000.
The total crypto market cap dropped about 3% to roughly $3.1 trillion. Bitcoin traded near $89,975, down 2.7% over 24 hours after peaking above $94,000 intraday. Ethereum fell about 3.4% to $3,123, and XRP slipped roughly 4% to $2.00.
Mid-caps and smaller tokens were hit harder: Uniswap was down ~7% to $5.33, Polkadot slid ~8% to $2.06, and Ethena dropped about 10% to $0.2486. The Crypto Fear & Greed Index remained in fear, nudging up to 29.
Derivatives showed strain: CoinGlass reported $519 million in liquidations in the past 24 hours, with longs accounting for over $370 million. Open interest eased about 1.7% to $131 billion, and the average market RSI sat near a neutral-leaning 39.
Why the Fed rate cut didn’t lift crypto
The Fed cut the federal funds target by 25 basis points on Dec. 10 to a 3.50%–3.75% range—an outcome markets had largely priced in. That left little fresh stimulus for risk assets, producing a classic sell-the-news reaction as Bitcoin fell from above $94,000 to below $90,000.
Chair Jerome Powell’s tone was cautious: inflation remains above target at 3.2% and November job growth was modest, prompting guidance that further easing may be limited and that only one more cut is projected by 2026. That hawkish-leaning messaging tightened expectations for future easing.
Bond markets tightened immediately. The 10-year Treasury yield rose about 5 basis points to ~4.25%, and Japan’s 2-year yield climbed above 1%—its highest in a decade—raising the cost of yen-funded carry trades that often leverage crypto positions. The unwind of those trades, combined with high leverage into the Fed meeting, amplified selling pressure.
CME FedWatch probabilities also shifted: the chance of another rate cut by March 2026 fell to about 40% from roughly 70% earlier in the week, removing a macro tailwind for speculative positioning.
Short-term outlook and analyst views
Standard Chartered called the decision a “hawkish cut,” lowering its year-end Bitcoin target to about $100,000 and identifying $88,000–$84,000 as the first meaningful support band.
Nic Puckrin, investment analyst and co-founder of The Coin Bureau, noted that uncertainty over the Fed’s 2026 path limits a December rally. He said markets struggle when expectations shift from hope to hesitation, especially amid thin liquidity. Short-term recovery will likely depend on steadier funding conditions and clearer spot flows; until then, price action may remain choppy and driven more by positioning than momentum.
