Bitcoin fell to around $90,200 Wednesday even though the Federal Reserve cut interest rates by 25 basis points. Traders hoped the cut would offer some support, but the move did little to improve sentiment and Bitcoin continued to lose ground.
Fed Treasury Bill Purchase Becomes Key Detail for Traders
Swan Bitcoin’s John Haar said the part of the Fed meeting that took trading desks by surprise was not the rate cut itself, but the announcement that the central bank will buy approximately $40 billion in Treasury bills during the next month. The Federal Reserve has not contributed to its balance sheet in any significant way since quantitative tightening began in 2022, aside from its brief response to the 2023 banking scare.
As traders expected liquidity to tighten, the decision to restart Treasury bill purchases stood out, with many interpreting it as a sign that the Federal Reserve wants additional short-term funding into the system.
The rate cut was already expected
The cut itself was not the problem. Markets had anticipated this move for weeks, so there was no surprise to drive new buying.
Data of Myriada prediction platform owned by Decrypt’s parent company, showed sentiment becoming more cautious:
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probability of a “Santa Claus Rally” fell to 17%.
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Chances of Bitcoin Reaching $100,000 instead of falling to $69,000 fell for 5 percentage points overnight.
Traders weren’t waiting for the cut: they had already moved on to what comes next.
Fed projections for 2026 reduce confidence
The Federal Reserve updated dot diagram reduced the number of rate cuts planned in 2026. That detail was one of the main drivers of Bitcoin’s fall.
Fewer expected cuts mean traders now assume:
HashKey Group’s Tim Sun said Bitcoin fell because traders adjusted to these projections immediately, not because of Wednesday’s cut itself.
Political and fiscal changes in 2026 are adding pressure
Sun also noted that 2026 It is a key year in American politics. Midterm elections will be held and a Trump administration would likely aim to:
While that combination can support short-term growth, it often drives up prices, which in turn forces long-term interest rates higher. When long-term rates rise, assets that rely on abundant liquidity (including Bitcoin) tend to weaken.
AI infrastructure costs limit room for Fed rate cuts
Tim Sun said spending on AI infrastructure has increased sharply, with companies allocating more money to data centers, power supply and specialized hardware. These projects have kept the costs of certain inputs steady, slowing the pace at which prices fall. If these costs remain high, the Federal Reserve could have less room to cut rates, which has direct implications for assets like Bitcoin.
Also read: Bitcoin Near $94K Ahead of Fed Rate Decision