Federal Reserve cuts interest rates by 25 basis points: Bitcoin surges then pulls back, market enters a critical battle period

Eastern Time December 10th, the Federal Reserve announced a 25 basis point cut to the benchmark interest rate. After the decision was announced, Bitcoin briefly surged above $94,000 before encountering selling pressure and retreating.

According to data from the Gate trading platform as of December 11th, Bitcoin is currently trading at $91,012, down 1.09% over the past 24 hours. Meanwhile, Ethereum’s price also fell to $3,260, a 1.93% decline in the last 24 hours.

Market analysis indicates that this typical “buy the rumor, sell the news” pattern reflects traders taking profits on already priced-in rate cut expectations.

01 Market Reaction

The Fed’s last interest rate decision for 2025 has been finalized. As widely expected, the Fed announced a 25 basis point rate cut.

Following the rate decision, the crypto market experienced intense volatility. Bitcoin’s price surged sharply, quickly breaking through the $94,000 resistance level and reaching a high near $94,477.

However, the rally was short-lived, and the price soon faced strong selling pressure, quickly retreating. As of December 11th, Bitcoin’s price fell back to around $91,012, a 1.09% drop within 24 hours.

Driven by Bitcoin, major cryptocurrencies generally showed a pattern of rising and then falling back. Ethereum also experienced rapid fluctuations, briefly breaking above $3,400 before retreating to $3,260, a 24-hour decline of 1.93%.

02 Technical Perspective

From a technical analysis standpoint, Bitcoin retreated after reaching around $94,477, indicating significant technical resistance at that level.

Data from the Gate platform shows that Bitcoin’s current direct support level is near $90,708, while resistance is at $94,477. The price retreat suggests market buying interest around resistance levels is weak, and traders are taking profits after the Fed decision.

For Ethereum, technical support is at $3,243, with resistance at $3,447. The current price is hovering above support but with clearly insufficient upward momentum.

This technical performance is closely related to market liquidity conditions. Although the Fed is cutting rates, market focus is more on the details of its liquidity operations.

The Fed’s policy adjustments have changed the dollar liquidity environment, altered reserve management approaches of traders, and affected large-scale capital flows that can influence Bitcoin and the broader altcoin markets. When the Fed signals the purchase of notes or loosening of bank reserves, intermediaries find it easier to handle large crypto transactions.

03 Altcoin Divergence

In the altcoin market, a clear divergence trend has emerged. Although major coins generally retraced, some altcoins performed remarkably.

According to data from the Gate platform, after the Fed decision, DOPE tokens surged by 135%, PSTAKE rose 30%, and PELL increased 25%. These strong performances show that market risk appetite has not fully diminished.

In contrast, many altcoins experienced larger drops as Bitcoin retreated. This divergence reflects selective investment strategies prevalent in the current market environment.

Analysts point out that tokens with clear on-chain activity, revenue streams, or links to real economic activities tend to attract capital inflows once financing costs decrease.

04 Market Sentiment Indicators

The cryptocurrency Fear & Greed Index is currently at 29, indicating a “fear” zone. Since October, this index has fluctuated between fear and extreme fear.

The subdued market sentiment is linked to several factors. Short-term liquidity shifts, Fed guidance on future policies, and broader macroeconomic uncertainties all influence investors’ risk preferences.

While rate cuts theoretically favor risk assets, when the market has already priced in this expectation, traders often take the opportunity to lock in profits or reduce risk.

On the other hand, the Fed’s decision to halt quantitative tightening could support Bitcoin’s recovery. Any signals of quantitative easing would further inject momentum into the market.

05 Investment Strategy Recommendations

For short-term trading, the current market environment suggests adopting a cautious approach. Focus on pullback buying opportunities and set reasonable stop-loss and take-profit points.

Bitcoin’s key support near $90,708 could offer a short-term trading opportunity if the price stabilizes at that level. Similarly, Ethereum’s support at around $3,243 is worth watching.

Investors should closely monitor real-time data on the Gate platform, especially the interplay of trading volume and price movements, as well as rotation opportunities within the altcoin market.

Future Outlook

The performance of the crypto market following the Fed decision reflects a generally cautious stance among traders. Bitcoin briefly touched $94,477 before retreating to around $91,012, indicating that the market is still digesting this anticipated policy change.

As 2025 draws to a close, market focus will shift to 2026 policy expectations and the broader macroeconomic environment. Institutional allocations to Bitcoin ETFs, the gradual refinement of regulatory frameworks, and increasing mainstream acceptance of cryptocurrencies will play a more significant long-term role than any single rate decision.

Regardless of short-term volatility, the trend of cryptocurrencies gradually becoming part of the mainstream financial system appears irreversible.