Bitcoin and ETH whipsaw after Fed’s quarter-point cut and caution on further easing

Bitcoin and ether swung back and forth on Wednesday after the Federal Reserve delivered a quarter-point rate cut but paired it with language signaling a higher bar for additional easing.

The Federal Open Market Committee (FOMC) lowered the federal funds rate to 3.5%–3.75% in a 9–3 split vote, with two regional presidents opposing the reduction and Fed Governor Stephen Miran pushing for a deeper 50-basis-point move. Markets initially reacted positively to the headline cut, but prices faded as traders processed the return of phrasing the Fed has used ahead of pauses, including a pledge to “carefully assess incoming data” before making further adjustments.

Despite the cautious tone, the CME FedWatch tool — a derivatives-based gauge that uses fed funds futures to estimate rate-cut odds — now shows a nearly 40% probability of another quarter-point cut by the Fed’s March meeting.

Bitcoin whipsawed between $93,200 and $91,700, while ether traded in a similarly choppy $3,340–$3,440 range. Other top cryptocurrencies, including Solana, XRP, and BNB saw similar trading patterns.

Adding to the volatility, the Fed said it will restart Treasury bill purchases, beginning with $40 billion in bills on Dec. 12. Fed watchers often refer to this type of reserve-management buying as “QE-lite,” echoing the central bank’s bill-purchase program in late 2019.

Analyst outlook

CryptoQuant analysts say bitcoin’s rally could extend toward $112,000 if the Fed turns more decisively dovish and BTC breaks key resistance levels at $99,000 and $102,000.

Julio Moreno, CryptoQuant’s head of research, told The Block that the upside case hinges not just on rate cuts, but on “how quickly the Fed signals it will cut next year and what it projects for inflation.” Today’s pause-style language may complicate that setup, traders said.

Other analysts see Wednesday’s announcement as less hawkish than feared but still leaves markets in an uneasy holding pattern. “Today’s FOMC decision wasn’t quite as hawkish as many market participants were expecting, so markets are breathing a sigh of relief,” said Nic Puckrin, investment analyst and co-founder of The Coin Bureau.

Puckrin said the initial reaction in bitcoin and equities reflected relief at the Fed’s tone, though projections showing only one rate cut next year — “fewer cuts than investors were hoping for” — are tempering that optimism.

“This, and the diverging opinions within the committee, inject a fresh dose of uncertainty into the macro outlook,” he added, saying it may limit risk-asset upside heading into year-end.

David Hernandez, crypto investment specialist at 21Shares, was more optimistic that the cut could mark the start of a broader shift in risk appetite. “Today’s rate cut is a life ring for a sunk Bitcoin,” he said, adding that cheaper money “brings fresh capital into the system, and history shows that plenty of it eventually lands in crypto.”