On December 11, the latest Fed rate decision gave traders what they expected on paper and something more complicated in the details. The Federal Open Market Committee (FOMC) delivered another 25 basis point interest rate cut, bringing the target range down to 3.50 percent to 3.75 percent. This was the Fed interest rates cut for the third time in a row, which normally would sound like a clear positive for risk assets, bitcoin, Ethereum and the broader crypto markets.
Instead, markets quickly started describing it as a “hawkish cut”. Three dissenting votes exposed widening internal divisions. The Fed statement changed its wording on future easing and quietly dropped its reference to unemployment being “relatively low”. At the same time, the Fed announced it will buy 40 billion USD of Treasury bills over a 30 day window starting December 12, adding a fresh liquidity layer that sits behind every chart from SP500 futures to BTC USD.
For crypto traders, that mix of easier policy, cautious tone and visible disagreement inside the FOMC creates a familiar push and pull. It supports the long term liquidity story, but it also caps the clean “pivot” narrative that usually powers a strong crypto rally.
Fed Rate Decision: Cut Delivered, Message Tightened
The headline of this Fed meeting was straightforward. A 25 basis point Fed rate cut, target range now 3.50 to 3.75 percent, in line with what futures had priced. The decision itself was not the surprise. The nuances around it were.
The statement now says the Committee will “consider the magnitude and timing of further adjustments” instead of simply hinting at a series of cuts. That is central bank code for “we are not promising much more”. At the same time, the earlier language describing unemployment as “relatively low” disappeared. After months of talking up the strength of the labor market, the Fed is now acknowledging that the jobs picture looks less comfortable.
Powell reinforced that shift in the press conference. He said policy is now near the upper end of a neutral range and stressed that “no one is treating rate hikes as a baseline expectation”. Inflation risks are still there, but he framed a big piece of that as tariff driven. If those tariffs are rolled back or fade, inflation could drift toward the lower half of the 2 percent band without aggressive tightening. On the labor side, he admitted that prior data likely overstated the strength of the jobs market and that downside risks to employment are rising.
Put together, this is why traders have quickly started calling it a hawkish Fed cut. Rates are lower, but the bar for future easing is higher than markets hoped a few months ago.
Why This Interest Rate Cut Feels Like A “Hawkish Cut”
What really stands out in this Fed rate decision is the scale of disagreement on the Committee. Three members dissented. One wanted a larger 50 basis point move, while two preferred no change at all. That kind of split makes it obvious that the FOMC is struggling to balance sticky inflation against growing labor market risk.
It also explains why markets are now so focused on 2026. Current pricing implies about 55 basis points of additional cuts over next year. The probability of yet another cut at the January Fed meeting sits below 25 percent. That is a very different profile from an aggressive easing cycle.
The term “hawkish cut” captures that tension. The Fed is easing, but it is also slowing the forward path and warning that it will not chase every soft data point with fresh stimulus. For high beta assets such as bitcoin and Ethereum, that means less of a one way bet and more of a grind that reacts to each jobs report and inflation print.
How Crypto Markets Reacted To Fed Rate Cut
Going into the announcement, BTC USD was already on the move. Headlines like “bitcoin jumps to 94,000” captured the pre meeting push into resistance as traders tried to front run a dovish surprise. Once the Fed rate cut and statement hit the tape, the tone cooled. Bitcoin price slipped back toward the low 92,000 area, and intraday charts turned choppy rather than explosive.
That pattern fits a now familiar script for how crypto markets reacted to Fed rate cut news this cycle. When the Fed merely confirms what is priced and the language sounds cautious, crypto often spikes first and then mean reverts. In this case:
- Bitcoin reaction to Fed rate cut headlines was positive for a few hours, then faded into a tight range.
- Ethereum reaction to Fed decision was slightly softer, with ETH giving back earlier gains and underperforming BTC on the day.
- There was no full scale altcoin mania. Some large caps bounced, others stalled, and the overall crypto rally narrative remained conditional rather than confirmed.
The message from price action is simple. Traders like easier policy in principle, but they are not willing to chase until they see stronger confirmation in the charts and in the data.
Cross Asset Signals: SP500, Gold And USDCHF
Crypto never trades in isolation, and this Fed meeting moved the whole cross asset map.
Equities were already strong before the decision. The S&P 500 and related SP500 products were trading near record territory, with many desks talking about “SP500 near all time high before Fed meeting” as a sign that risk sentiment was already stretched. After the announcement, stocks edged higher again. For bitcoin and Ethereum, a firm SP500 is still a supportive backdrop, but it also raises valuation questions if earnings do not keep up.
On the commodity side, the gold outlook after Fed rate cut headlines was volatile but ultimately constructive. Gold and silver whipsawed immediately after the decision, then both resumed their climb, with silver hitting a fresh record high. Lower policy rates, a softer path for real yields and continued central bank buying give gold price action a steady tailwind, even if intraday swings remain violent.
FX moves filled in the rest of the picture. Treasury yields slipped, the broad USD index weakened, and non USD currencies bounced. The USDCHF forecast after Fed decision commentary now focuses on whether the pair can hold inside a tight range or break down as the franc remains one of the stronger safe havens. A weaker USD and resilient non USD FX usually help crypto at the margin by easing global financial conditions.
Bitcoin Price: BTC USD At Key Resistance And Support
Technically, bitcoin is still locked inside a broad range even after three consecutive Fed rate cuts. Over recent weeks, BTC USD has spent most of its time between roughly 81,000 and 94,000. Traders repeatedly sold pushes into the 93,500 to 94,000 band and bought pullbacks closer to the high 80,000s.
That sets clear reference points. A daily close above the 93,500 to 94,000 resistance area, backed by strong spot volume, would be an important signal that sellers are finally exhausted. That kind of move could trigger short liquidations and open a path toward the 100,000 region where many long term calls are clustered. Without that confirmation, the phrase “hawkish Fed cut threatens crypto rally” will keep circulating and traders will treat every spike into resistance as a potential bull trap.
On the downside, the first important shelf sits around 90,000, with deeper demand zones near 88,000 and then around 82,000. If price breaks 88,000 on rising volume, attention will quickly shift to those lower pockets where previous dips have found buyers. The way bitcoin trades at those levels, especially funding, open interest and spot flows, will matter more than any single support line.
Ethereum Price And The Wider Crypto Market
Ethereum has largely echoed bitcoin’s rhythm, with slightly bigger swings in both directions. ETH rallied into the Fed meeting, then slipped after the announcement as the “hawkish cut” narrative took hold. The ETH to BTC ratio is still near the low end of its recent band, a sign that marginal capital prefers BTC when the macro backdrop feels unclear.
Until BTC resolves the 88,000 to 94,000 corridor, Ethereum price is likely to stay range bound with sharp reversals. A healthier crypto rally would show up as:
- BTC breaking and holding above resistance, not just wicking through it.
- ETH starting to outperform on up days, with the ETH to BTC ratio turning higher.
- Broader participation across large cap altcoins instead of a narrow bitcoin only move.
For now, most desks are anchoring Ethereum decisions to bitcoin levels. That means smaller sizing inside the range and more conviction only if BTC confirms a break in either direction.
What Markets Are Watching Next For 2026
The bigger story after this Fed meeting is the 2026 policy path. Major institutions are split. Some argue that improving inflation will give the Fed room to cut again by March. Others expect a pause in January and a wait and see approach well into the first half of the year. A third group thinks easing might be delayed until after mid 2026 unless growth clearly slows.
On top of that, there is growing attention on who might lead the Fed after Powell’s term ends. Any hint that a more dovish or more hawkish successor could be chosen would immediately show up in yields, the SP500, gold price, FX pairs like USDCHF and of course in BTC USD.
In the short term, this uncertainty means more headline sensitivity. Jobs data, inflation prints, FOMC minutes and speeches can all move bitcoin price and Ethereum price quickly. Liquidity operations, such as the 40 billion USD in bill purchases, also matter more now because they tell traders how committed the Fed is to keeping funding conditions smooth.
Bitunix Analyst Takeaway
The latest Fed rate cut supports the long term case for risk assets, but the label “hawkish cut” is accurate. The easing path is slower, the FOMC is more divided, and the bar for additional stimulus is higher. For crypto traders, that means treating the Fed as a source of volatility rather than a one way tailwind.
The practical approach is straightforward. Respect the key BTC USD levels around 94,000 on the upside and 88,000 on the downside. Let price confirm breaks rather than guessing ahead of time. Use bitcoin as the anchor for Ethereum and the broader crypto markets. Pay attention to cross asset signals from the SP500, gold and FX, especially USD pairs.
In a world where Fed interest rates cut for the third time in a row still counts as a hawkish Fed cut, the edge goes to traders who stay flexible, read the data, and wait for confirmation before sizing up into any crypto rally.
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