Crypto markets saw a mild recovery after the US Federal Reserve executed its third consecutive interest rate cut this year, totalling 0.75% between September and December.
Analysts noted that despite long-term bullish implications, each cut triggered short-term sell-offs consistent with a “buy the rumour, sell the news” pattern.
Onchain analytics firm Santiment said there is “typically a bounce after the dust settles,” adding that slight fear or retail selling could indicate the downswing’s end.
Lower borrowing costs usually increase risk appetite and encourage capital inflows into speculative assets such as cryptocurrencies.
CoinEx chief analyst Jeff Ko said the latest cut was “widely expected and pretty much priced in,” though the Fed’s updated dot plot “leaned slightly hawkish.”
Ko added that the Fed’s $40 billion short-term Treasury purchases were a liquidity tool rather than a stimulus-driven programme, but markets still viewed them as mildly bullish.
US equities reacted positively, helping Bitcoin (CRYPTO:BTC) recover from its initial post-cut dip below $90,000 to reach $93,500 on Coinbase before pulling back.
Fidelity’s director of global macro, Jurrien Timmer, said Bitcoin has underperformed equities this year but appears to be entering a more mature market phase.
Timmer noted that the current cycle looks “pretty mature,” though it remains difficult to determine whether a new crypto winter is beginning.
At the time of reporting, Bitcoin price was $92,419.81.