Bitcoin News Today: Bitcoin Dips Below $90K as Fed Signals Hawkish Cuts, Yields Weigh on Crypto Rally

Bitcoin (BTC) Faces Mixed Signals as Market Waits for Fed Rate Decision

Bitcoin (BTC) faces mixed signals as the market awaits the Federal Reserve's (Fed) rate decision. Prices remain steady near $91,800, bolstered by expectations of a 25-basis-point rate cut this week. However, rising U.S. 10-year Treasury yields to 4.15% contradict the traditional bullish impact of rate cuts, signaling caution from investors.

The Fed's potential cut is framed as a response to a weaker labor market and a desire to support struggling consumers amid strong stock performance. Despite these factors, analysts warn that the central bank's forward guidance could be hawkish, dampening the positive effects of the rate reduction.

Bitcoin has struggled to reclaim key resistance levels above $93,500. Recent data shows that BTC has dipped below the cost basis for short-term holders, exposing 40% of recent buyers to prices between $75,000 and $125,000. This weak support level has triggered concerns among traders, particularly after an overnight price drop to $86,000, which wiped out nearly $200 billion from the crypto market.

Why the Standoff Happened

The current standoff between Bitcoin and a potential Fed rate cut highlights a growing divergence between risk assets and the broader economy. Despite robust institutional inflows and a bear market net gain of 715% for BTC, the altcoin market underperformed, with only brief altcoin seasons and a meme token boom.

Meanwhile, the U.S. Treasury yield's recent rise suggests investors are wary of the Fed's messaging. A "hawkish cut" could mean that the central bank signals a pause on further rate reductions, which could pressure risk assets like Bitcoin. Market participants are also factoring in the impact of Japan's potential rate hike and dollar liquidity tightening, which may affect global bond markets.

What Analysts Are Watching

Analysts are closely monitoring the Fed's policy trajectory and how it will be communicated. Markus Thielen of 10x Research emphasized that the post-decision press conference will likely shape market sentiment, with a non-committal stance on 2026 easing weighing on crypto. Greg Magadini from Amberdata added that the focus remains on whether the Fed will deliver a dovish or hawkish cut, with recent labor and inflation data supporting a rate reduction.

On the crypto side, Glassnode highlighted that the late November price dip created one of the strongest accumulation zones for BTC near $80,000. This level, now a dense cost basis cluster, could act as a support area. However, forced selling and derivatives data indicate short-term volatility remains a risk for traders.

Risks to the Outlook

Despite expected rate cuts, yields have moved up due to concerns over fiscal debt and persistent inflation. This dynamic suggests that the traditional link between Fed easing and a weaker dollar may be less impactful this time, reducing the liquidity-driven support for Bitcoin. Institutional participation has helped reduce BTC's volatility, but recent capitulation at levels below $90,000 highlights short-term pressure. Kyle Chassé from Amberdata noted that large holders and Wall Street products have been net sellers since November, undermining the ETF-driven buying narrative.

What This Means for Investors

For investors, the key takeaway is that the Fed's messaging will likely outweigh the actual rate cut's impact. A hawkish forward guidance could lead to a weaker BTC price even after a cut, as seen in recent Treasury yield movements. Conversely, a dovish stance could drive risk-on behavior and support a Bitcoin rally.

Bitcoin's short-term path remains uncertain. While institutional inflows and strong on-chain data suggest a bullish foundation, the market must navigate a fragile balance between rate easing and inflation concerns. Investors are advised to monitor both U.S. and global central bank actions, particularly as Japan's potential rate hike adds to the complexity of the global liquidity picture.