Bitcoin News Today: Fed's Rate Cut Hesitation Stalls Bitcoin's Risk-On Rally: A Market Paradox

The Federal Reserve's cautious stance on future rate cuts has cast a shadow over risk assets, with Bitcoin and other cryptocurrencies bearing the brunt of market uncertainty. Despite a 25-basis-point rate reduction in October, which marked the central bank's second easing this year, investors remain wary as Fed Chair Jerome Powell signaled that a December cut is "not guaranteed." The move, while historically supportive of risk-on assets, has failed to ignite a sustained rally in Bitcoin, which has fallen below $107,000 amid fears of prolonged hawkish policy, as Bitcoin tumbles to $109.2K after the Fed decision.

The Fed's updated projections, which slashed expected 2026 rate cuts from four to two, have exacerbated market jitters. Analysts attribute Bitcoin's weak performance to a shift in central bank priorities—from inflation control to labor market stability—raising concerns that rate cuts could be perceived as reactive rather than proactive, a point noted in the Yahoo coverage. This sentiment is echoed in futures markets, where the probability of a 2026 rate hike now stands at 18%, further dampening speculative enthusiasm, as explained in Crypto’s Next Rally on Hold. Meanwhile, the end of quantitative tightening (QT) has yet to translate into meaningful liquidity gains for crypto, as traders grapple with macroeconomic headwinds like a weakening jobs market, a trend highlighted by Cointelegraph.

Historically, Bitcoin has benefited from Fed easing, as lower borrowing costs drive capital into higher-risk assets. In 2019 and 2020, rate cuts coincided with crypto rallies, reinforcing the inverse relationship between the U.S. dollar and BTC, as earlier Yahoo coverage observed. However, this cycle appears more volatile. The Bank of Japan's recent hawkish pivot and geopolitical tensions, including U.S.-China trade concerns, have compounded uncertainty, leaving risk assets in limbo—an outlook also touched on in the Yahoo piece. For now, Bitcoin's technical outlook remains bearish, with price action suggesting a breakdown from an ascending channel and a potential test of support near $107,000, as detailed in Bitcoin price drops below $107k.

Institutional demand for crypto has also cooled, particularly in altcoins, as delayed ETF approvals and regulatory uncertainty dampen inflows. While Bitcoin ETFs continue to attract capital—posting $921 million in inflows last week—altcoins like Solana and Cardano have seen sharp pullbacks, a divergence that ETF delays hit institutional demand highlights. This divergence underscores Bitcoin's role as a macro hedge in a fragmented market. Meanwhile, the race to launch new crypto ETFs shows no signs of slowing: Bitwise and VanEck have accelerated filings for XRP and Solana products, with potential approvals expected within weeks, as CryptoNinjas reports they are fast-tracking filings.

Globally, regulatory efforts are intensifying. Nigeria SEC reports $218M in Ponzi scheme losses, urging swift crypto regulation to combat fraud. In the U.S., bipartisan crypto bill talks advance, though lawmakers remain divided on key policy questions. Tether's T3 Financial Crime Unit, which froze $300 million in illicit funds, also made headlines, underscoring private-sector efforts to bolster crypto security.

As markets await clarity on the Fed's path, the interplay between monetary policy, institutional demand, and regulatory action will shape the next chapter for cryptocurrencies. For now, patience—and liquidity—remain in short supply.