The market is taking the Federal Reserve’s move with cautious optimism.
The recent 25 bps rate cut to 3.50–3.75% by the Fed on the 10th of December marks the third cut of 2025. Consequently, traders are now eyeing a potential liquidity boost, putting Bitcoin [BTC] back on the radar.
But that’s not all. One key point in the Fed’s statement is that they’ll start buying $40 billion in U.S. T-bills over the next thirty days.
By doing this, the Fed injects extra short-term liquidity back into the banking system.
Source: X
Simply put, the U.S. economy is about to get a fresh wave of liquidity.
With another 25 bps rate cut and $40 billion in Treasury bill buys from financial institutions, the Federal Reserve is clearly trying to push cheaper capital back into the system as labor-market risks start creeping higher.
And yet, BTC has reacted with a 2.14% dip, breaking below $90k.
Notably, this move is no fluke. The Fed may be boosting short-term liquidity, but it’s also stirring concern about longer-term risks, especially as markets start pricing in a pause in rate cuts heading into 2026.
Macro volatility puts Bitcoin’s 2026 rally under pressure
It appears investors were already prepared for Bitcoin’s volatility.
From mining firms to BlackRock, millions in BTC were unloaded ahead of the FOMC. With inflation still running hot and the Fed split on how aggressively to cut rates next year, investors are clearly staying cautious.
And that caution isn’t misplaced. Over the last four FOMC meetings, Bitcoin has repeatedly pulled back. In fact, after the October FOMC, BTC slid almost 30% to $80k, marking its first major flash crash of 2025.
Source: TradingView (BTC/USDT)
Against this setup, the question remains: Is history about to repeat itself?
A recent Glassnode report highlights weak bids around $90k, reinforcing the cautious sentiment. Add aggressive selling by smart money, and Bitcoin is clearly in a supply-skewed setup, signaling potential downside pressure.
Looking ahead, BTC’s base-building for a Q1 2026 rally is still uncertain. With investors reshuffling, macro volatility lingering, and weak FOMO, Bitcoin could repeat its post-FOMC breakdown, testing key support levels.
Final Thoughts
- The Fed’s recent moves inject short-term liquidity, but concerns over long-term risks and a potential pause in 2026 rate cuts keep investors cautious.
- Weak bids around $90k and aggressive selling by smart money leave Bitcoin vulnerable to a repeat of post-FOMC pullbacks, putting key support levels to the test.
Source: https://ambcrypto.com/bitcoin-dips-after-feds-25-bps-cut-is-btcs-2026-rally-at-risk/
