Bitcoin briefly surged past $94,000 on Wednesday before retreating as Federal Reserve Chair Jerome Powell delivered a carefully balanced message following a widely expected 25 basis-point interest-rate cut.
After trading near $92,000 for most of the session, bitcoin jumped to a high of about $94,400 during Powell’s post-meeting press conference, when he highlighted the risk that the U.S. labor market may be softer than previously assumed. The move quickly reversed, however, after Powell underscored that inflation remains above target and that the central bank’s fight is not yet complete.
Bitcoin was last seen around $92,000, down roughly 0.8% over the past 24 hours. Ether continued to show relative strength, hovering above $3,300 and gaining about 1.1% over the same period.
U.S. equities edged higher late in the trading day, with the Nasdaq up 0.5% and the S&P 500 rising 0.7%. In currency markets, the dollar recorded its sharpest move, falling about 0.6% against the yen, euro and British pound.
Powell said monetary policy is now “within a range of plausible estimates of neutral,” giving policymakers flexibility to evaluate the timing and magnitude of further adjustments. He added that the Fed is “well positioned to wait and see” before making additional rate cuts, noting that a substantial slate of economic data will be released ahead of the January meeting.
Alongside the rate cut, the New York Fed said it will begin purchasing short-term Treasury bills and Treasuries with maturities of up to three years if needed, targeting roughly $40 billion in purchases over the next month starting Friday. The measure is aimed at easing financial conditions without signaling a return to full-scale quantitative easing. Powell said the purchases will remain “elevated” for several months.
The move marks a shift after three years of balance-sheet reduction following the pandemic-era expansion.
Analyst commentary
“The Fed made it clear this cut does not signal the start of an aggressive easing cycle,” said Daniela Hathorn, senior market analyst at Capital.com, adding that future decisions will hinge on incoming inflation and labor-market data. While policymakers agreed on modest easing amid uneven post-shutdown data, she said the updated guidance stressed caution.
Brian Coulton, chief economist at Fitch Ratings, said the decision was a close call, with two FOMC members voting to leave rates unchanged. A mild recent pickup in core inflation likely tipped the balance in favor of another cut, while keeping rates slightly above neutral. Coulton said Fitch expects two further cuts by June 2026, taking the upper bound of the fed funds rate to 3.25%.
David Hernandez, crypto investment specialist at 21Shares, said Powell is “threading the needle” between the Fed’s dual mandate by signaling a potential pause in rate cuts while restarting Treasury purchases. For bitcoin to break out of its range, Hernandez said it will need fresh momentum to overcome concentrated short positioning near the $94,500 resistance level.
“If spot ETF inflows pick up as the cost of capital declines, that could be the catalyst that pushes bitcoin back above the $100,000 psychological threshold,” he said.
