BTC dips to $90,000, interest rate cut implemented = all the good news is out.

Original article | Odaily Planet Daily ( @OdailyChina )

Author | Ethan ( @ethanzhang_web3 )

Early this morning, Powell announced a 25 basis point cut to the benchmark interest rate, bringing it to 3.50%-3.75% . This marks the third consecutive rate cut this year and the year's close, with a cumulative cut of 75 basis points this year. However, the dot plot reveals a less optimistic picture, reflecting intense internal competition within the Fed. While overall expectations are slightly more dovish than the previous one, internal consensus is weakening: as many as seven officials dissented from the decision, with six even favoring holding rates steady. Furthermore, the median interest rate forecast is identical to that of September, suggesting that after this year's aggressive rate cuts, the pace of easing will slow significantly in the next two years (likely only one rate cut each year). This complex mix of hawkish and dovish signals, coupled with extremely cautious expectations, seems to have failed to instill sufficient bullish confidence in the market. Consequently, the risk-driven cryptocurrency market is shrouded in fear and is experiencing a sustained decline.

OKX real-time market data shows that as of around 11:40 AM today (all times mentioned below are from this time), BTC fell below $90,000, currently trading at $89,790.5, a 24-hour drop of 2.45%, breaking below the $90,000 mark; ETH fell below $3,200, currently trading at $3,181.24, a 24-hour drop of 4.47%; and SOL fell below $130, currently trading at $129.5, a 24-hour drop of 4.88%.

According to SoSoValue, most sectors in the crypto market experienced a pullback, with the DePIN sector leading the decline at 4.28% in the past 24 hours. Filecoin (FIL) fell 7.50%, and Render (RENDER) dropped 5.52%. Other sectors saw declines: CeFi fell 1.00% in the past 24 hours, with Cronos (CRO) down 3.39%; Layer 2 fell 2.15%, but Mantle (MNT) remained relatively strong, rising 1.12%; DeFi fell 2.35%, with Hyperliquid (HYPE) bucking the trend and rising 2.95%; Layer 1 fell 2.54%, with Zcash (ZEC), which had previously seen significant gains, falling 10.78%.

In the US stock market, according to data from msx.com , as of the close of trading that day, the Dow Jones Industrial Average rose 1.05%, the S&P 500 rose 0.67%, and the Nasdaq Composite rose 0.33%. Cryptocurrency stocks generally fell, with ETHZ falling more than 8.1%, HODL falling more than 6.39%, and ABTC falling more than 5.37%.

In derivatives trading, Coinglass data shows that $468 million in positions were liquidated across the network in the past 24 hours, including $331 million in long positions and $136 million in short positions. By cryptocurrency, $165 million was liquidated in BTC and $148 million in ETH.

Market sentiment has been released, and prices have continued to decline. Discussions about whether expectations have been fully priced in and whether the market is weak are also intensifying.

Below, Odaily will summarize the views and arguments of institutions and analysts regarding the market outlook.

What will be the future trend of Bitcoin?

Greeks.live: Year-end liquidity crunch limits the momentum for a renewed bull market.

Greeks.Live researcher Adam posted on social media that the Federal Reserve cut interest rates by 25 basis points as expected at its latest policy meeting and announced the resumption of its $40 billion short-term U.S. Treasury (T-bills) purchase program; its dovish stance will effectively replenish liquidity in the financial system and is a clear positive for the market.

However, it is still too early to mention "restarting quantitative easing (QE) to drive the bull market restart": Christmas and the year-end are approaching, and this period is usually the time when the crypto market has the worst liquidity and low market activity, so the momentum for a bull market restart is very limited.

Looking at cryptocurrency options data, by the end of December, over 50% of options positions had accumulated. The biggest pain point for BTC was at the $100,000 mark, while the biggest pain point for ETH was at $3,200. Implied volatility (IV) across major maturities declined this month, and market expectations for volatility continued to fall.

In summary, the current cryptocurrency market is weak, with year-end liquidity pressures and low market sentiment. A "slow decline" is the mainstream expectation in the options market; however, we should also be wary of a market reversal that may be triggered by sudden positive news.

ING: Improved inflation environment, maintains forecast of two rate cuts in 2026

ING Bank stated that the market currently expects the Federal Reserve to cut interest rates by another 50 basis points in 2026.

However, considering the current situation—the economy continues to grow, the unemployment rate is low, the stock market is near historical highs, and the inflation rate is closer to 3% than the Fed's 2% target—the reasons for the Fed to further ease policy are not sufficient. Nevertheless, the bank suspects that the inflationary environment in the coming months will be more conducive to interest rate cuts, providing support for further dovish action: although the threat of tariffs remains, its impact is milder and weaker than expected, giving more time for inflation-mitigating factors such as declining energy prices, slower housing rent growth, and weaker wage growth; the bank believes this will push inflation closer to 2% faster than the Fed expects.

In addition, with rising uncertainty surrounding the "employment" dimension of the Fed's dual mandate, Powell has mentioned that the Fed believes recent job growth data has been overestimated by about 60,000. ING maintains its original forecast that the Fed will cut interest rates twice in 2026, by 25 basis points each in March and June.

Goldman Sachs: To appease the hawkish camp, the threshold for future easing has been significantly raised.

Goldman Sachs analyst Kay Haigh stated that the Federal Reserve has completed its current round of "precautionary rate cuts." She pointed out, "The key prerequisite for justifying further near-term easing is that labor market data needs to weaken further."

The "hard dissent" from voting members and the "soft dissent" in the "dot plot" both highlight the hawkish camp within the Federal Reserve; the reintroduction of wording regarding the "degree and timing" of future policy decisions in the statement is likely intended to appease this camp. While this adjustment leaves open the possibility of future rate cuts, a significant degree of weakness in the labor market would be needed to trigger a new round of easing.

Analysts: Policy statement "dovey on the surface, hawkish on the underlying side," 100 basis point rate cut expected next year.

Analyst Anna Wong stated, "My assessment is that the overall tone of this policy statement and the updated forecasts leans towards dovishness, although there are some hawkish signals implied. On the dovish side, the Committee significantly revised upward the economic growth path and downward the inflation outlook, while maintaining the 'dot plot' forecasts unchanged; the Federal Open Market Committee (FOMC) also announced the launch of reserve management purchase operations."

“On the other hand, one signal in the policy statement suggests that the Committee is inclined to a prolonged pause in the rate-cutting cycle.” She further added, “Although the ‘dot plot’ shows only one rate cut in 2026—different from the market’s expectation of two—we believe the Fed will eventually cut rates by a cumulative 100 basis points next year. The core reason is that we expect wage growth to remain weak and we currently see no clear signs of inflation resurgence in the first half of 2026.”

summary

Although the Federal Reserve cut interest rates as expected this morning, the internal divisions revealed by the "dot plot" and expectations of a slowdown in easing have resulted in a complex mix of hawkish and dovish signals in the market. BTC fell below the $90,000 mark, with over $300 million in long positions being liquidated. This indicates that, in the absence of new funds, simply implementing an interest rate cut can no longer mask the reality of a year-end liquidity crunch.

Institutions generally believe that market activity will significantly decline in the short term due to the Christmas holidays and year-end settlement, with a "gradual decline" and "defensive" approach likely to be the main themes at the end of the year , and the momentum for a renewed bull market is very limited. However, looking at the long term, the focus of the game has shifted from simple inflation data to the performance of the labor market . Although institutions such as Goldman Sachs have warned that the threshold for future easing has been raised, if wage growth is weak next year or employment data deteriorates further, the market may still see a more aggressive interest rate cut path than expected. For investors, blindly buying the dip is not the optimal strategy before liquidity returns and macroeconomic signals become clearer.