Bitcoin briefly climbed above $94,000 on Wednesday before reversing course as Federal Reserve Chair Jerome Powell delivered a carefully calibrated message after the central bank’s widely expected 25 basis-point rate cut.
After trading near $92,000 for much of the session, bitcoin jumped to around $94,400 during Powell’s post-meeting press conference, when he flagged the risk that the U.S. labor market may be softer than previously assumed. The rally quickly unwound after Powell reiterated that inflation remains too high and that the Fed’s work is far from complete.
Bitcoin was last changing hands near $92,000, down about 0.8% over the past 24 hours. Ether extended its run of relative strength, hovering above $3,300 and up roughly 1.1% over the same period.
U.S. equities closed higher, with the Nasdaq gaining 0.5% and the S&P 500 advancing 0.7%. The most pronounced move came in currency markets, where the dollar fell about 0.6% against the yen, euro and British pound.
Powell said monetary policy now sits “within a range of plausible estimates of neutral,” giving policymakers flexibility on the timing and magnitude of future moves. He added the Fed is “well positioned to wait and see” on further rate cuts, noting that a substantial flow of economic data will arrive ahead of the January meeting.
Alongside the rate decision, the New York Fed said it will begin buying short-term Treasury bills and Treasuries with maturities of up to three years if needed, targeting roughly $40 billion in purchases over the next month starting Friday. The step is intended to ease financial conditions without signaling a return to full-scale quantitative easing. Powell said the purchases will remain “elevated” for several months.
The move marks a shift after three years in which the Fed steadily reduced its balance sheet following the pandemic-era expansion.
Analyst reaction
“The Fed made it clear this cut does not signal the start of an aggressive easing cycle,” said Daniela Hathorn, senior market analyst at Capital.com, noting that future decisions will hinge on incoming inflation and labor-market data. While policymakers agreed on modest easing amid uneven post-shutdown data, she said the updated communication emphasized caution.
Brian Coulton, chief economist at Fitch Ratings, said the decision was a close call, with two FOMC members voting to hold rates steady. A mild pickup in core inflation likely swayed the committee toward another cut, while keeping rates somewhat above neutral. Coulton said Fitch expects two additional cuts by June 2026, taking the upper bound of the fed funds rate to 3.25%.
David Hernandez, crypto investment specialist at 21Shares, said Powell is “threading the needle” between the Fed’s dual mandate by signaling a potential pause in rate cuts while restarting Treasury purchases. For bitcoin to break out of its range, Hernandez said it will need fresh momentum to overcome concentrated short positioning near the $94,500 resistance zone.
“If spot ETF inflows pick up as the cost of capital declines, that could be the catalyst that pushes bitcoin back above the $100,000 psychological mark,” he said.
