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The Fed just cut rates to 3.5%–3.75% as jobs cool and inflation stays sticky. Stocks held up, but Bitcoin fell below 90K. What’s next for crypto?The Fed just cut rates to 3.5%–3.75% as jobs cool and inflation stays sticky. Stocks held up, but Bitcoin fell below 90K. What’s next for crypto?

Fed Cuts Rates to 3.5% - 3.75%: What It Means for Bitcoin and the Entire Crypto Market

Author: Crypto Ticker

Source: Crypto Ticker

2025/12/11 23:27

The Federal Reserve just announced its third rate cut of the year, lowering the benchmark range to 3.5%–3.75%. While stocks reacted positively, edging near record highs, $Bitcoin plunged below $90,000 with a wave of liquidations hitting the market.

The mixed reaction highlights a deeper uncertainty: Is the Fed’s shift enough to support a sustained crypto rebound—or will sticky inflation and slow job growth keep markets volatile?

What the Fed Announced, And Why It Matters for Crypto

The Fed delivered:

A 25 bps cut (now 3.5%–3.75%)
Third rate cut this year
Unemployment rising
Job gains collapsing to just 20,000 (adjusted)
Sticky goods inflation driven by tariffs
Only one more cut expected in 2026
$40B Treasury bill purchases starting Dec 12 to support liquidity

Why this matters for Bitcoin

Rate cuts normally support risk assets. But this time, the messaging is mixed:

Inflation remains “sticky”, especially goods inflation
The labour market is slowing sharply
Liquidity injections are small compared to past easing cycles
Powell’s tone was cautious, not bullish

That’s why Bitcoin dumped below $90,000, triggering heavy long liquidations.

This is not a rejection of crypto—it's a recalibration of expectations. Markets hoped for a more aggressive easing cycle, but Powell confirmed this will be a slow, defensive, controlled pivot, not a 2020-style liquidity flood.

How the Rate Cut Impacts Crypto Short-Term

1. Bitcoin volatility spikes

$BTC fell to $90,210 (-2.63% weekly), confirming the market expected more from the Fed.
Rate cuts reduce borrowing costs, but sticky inflation limits the Fed’s ability to ease aggressively.

Result:
➡️ Short-term downside risk
➡️ High volatility
➡️ More liquidations likely around 88K–90K levels

2. Ethereum reacts worse than Bitcoin

$ETH is down 4.03% in 24h, sitting near $3,192.

Why?
ETH is more sensitive to macro tightening because:

It relies strongly on liquidity inflows
Altcoins historically underperform BTC in macro uncertainty
Investors rotate to BTC during risk-off phases

Unless liquidity improves, ETH may continue lagging.

3. XRP, SOL, ADA: Altcoins take a deeper hit

Other altcoins show noticeable drops:

$XRP: $2.00 (-5.86% weekly)
$Solana: $131.15 (-8.00% weekly)
$Cardano: $0.4165 (-6.59% weekly)

Altcoins always absorb the biggest impact when liquidity is uncertain.

Combine macro uncertainty + elevated funding rates + aggressive leverage → capitulation pockets.

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