Market uncertainty continues as internal divisions within the Federal Reserve and an unclear rate path through 2026 weigh on bitcoin and other risk assets.
Bitcoin (BTC) slipped below $90,000 following the Fed’s expected 25-basis-point rate cut to 3.25%, down roughly 2.4% since early Asian trading hours, according to CoinDesk data. Ether fell 4% to $3,190, while the CoinDesk 20 Index dropped more than 4%.
Traders attributed the muted reaction to mixed signals from the Fed, which also announced it will purchase $40 billion in short-term Treasury bills to manage liquidity in the banking system. The program is aimed at addressing short-term money market strains rather than broad balance-sheet expansion or long-term yield suppression.
The Fed’s internal divisions are adding to market uncertainty. Two FOMC members voted against the cut, and six indicated that a reduction was “not appropriate.” Additionally, the central bank signaled only one further rate cut in 2026, below market expectations for two to three reductions.
“The Fed is divided, and the market has no clear insight on rates until May 2026, when Chairman Jerome Powell will be replaced,” said Greg Magadini, director of derivatives at Amberdata. He added that the most likely near-term scenario is a “deleveraging” or market pullback to convince the Fed that lower rates are warranted.
Shiliang Tang, managing partner at Monarq Asset Management, noted bitcoin is tracking equities. “Crypto initially spiked on the news but steadily moved lower with stock futures, with BTC testing but failing to break $94k for the third time in two weeks,” Tang said, highlighting that implied volatility continues to drift lower.
Liquidity management, not QE
Analysts emphasize that the Fed’s short-term Treasury purchases differ from 2020–21 quantitative easing. Unlike traditional QE, which targeted long-duration Treasuries and mortgage-backed securities to inject liquidity and suppress yields, the current program is intended as a preventive measure to stabilize money markets.
“This is sadly not Lambo QE. More like ‘my Uber is 7 minutes away’ QE,” said Andreas Steno Larsen, founder of Steno Research. Pseudonymous observer EndGame Macro added, “Instead of risking a 2019-style scramble, the Fed is quietly creating a cushion to ensure the system has enough breathing room through the spring.”
