The Federal Reserve's third consecutive 25 basis point rate cut failed to sustain a Bitcoin rally. Ethereum and Bitcoin briefly climbed before whale selling triggered a sharp pullback.
What Happened: Market Reversal
On-chain platform Santiment noted that retail enthusiasm peaked before the announcement, setting up a classic "buy the rumor, sell the news" pattern. Volatility spiked minutes before Jerome Powell spoke.
A whale offloaded $100 million in Bitcoin ahead of the Federal Reserve chair's remarks. The Fed's decision came as expected, with the central bank maintaining its stance on moderate growth, sticky inflation and data-dependent policy adjustments.
Smart-money wallets holding 10 to 10,000 BTC have accumulated over 42,000 Bitcoin since Nov. 30.
Bitcoin has lagged equities and gold this year, raising the possibility of a catch-up rally as liquidity conditions improve.
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Why It Matters: Trader Dynamics
Social sentiment data reveals a split. Bitcoin holders stayed cautious while Ethereum traders rushed into the post-Federal Open Market Committee rally.
Ethereum traders faced immediate losses as whales sold into strength. The Fed shifted its liquidity stance between October and December, initially slowing balance-sheet runoff before restarting Treasury bill purchases after judging reserves too low.
Three consecutive rate cuts and improving liquidity create stronger conditions for Bitcoin heading into 2026, despite short-term volatility.
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