On December 10, the cryptocurrency market experienced a measured yet positive response following the Federal Reserve’s decision to reduce interest rates by 25 basis points. In a subsequent press conference, Fed Chair Jerome Powell addressed emerging risks in the labor market while indicating that future easing would depend on upcoming economic data.
Key digital assets, including Bitcoin and Ethereum, exhibited orderly price movements—neither exuberant nor overly cautious—implying that traders are still assessing whether this rate cut signals the initiation of a broader easing trend.
Crypto Market Cap Sees Incremental Growth Post-Fed Decision
Following the Fed’s announcement, the total crypto market capitalization began to exhibit gradual growth, gaining momentum especially after Powell’s remarks, and reaching around the $3.26 trillion threshold.
This behavior is characteristic of an early-stage reaction post-FOMC, where investors tentatively shift towards riskier assets while remaining cautious without clear indications of additional rate cuts.
Altcoin Market Also Reflects Cautious Optimism
Altcoins mirrored the behavior seen in Bitcoin, showing initial reluctance before ending the session on an upward trajectory. The altcoin market cap climbed back to around $1.46 trillion, signifying a healthier sentiment without strikingly aggressive moves.
This development relates to Powell’s careful outlook: while the Fed lowered rates, it underscores uncertainty and dependence on data. Traders seem to be pricing in potential easing, yet not fully translating this into bold commitments.
Bitcoin Stabilizes Above $92,000 with Positive Momentum
After a brief dip following the announcement, Bitcoin (BTC) rebounded and closed around $92,297. The Relative Strength Index (RSI) has edged closer to neutral-bullish levels (approximately 49–50), indicating that momentum is cautiously improving, albeit without strong trending activity.
Source: TradingView
Two primary factors appear to be bolstering Bitcoin’s price:
- The Fed’s acknowledgment of rising employment risks—a traditionally bullish signal for BTC.
- Market consensus on the likelihood of additional cuts, should labor conditions deteriorate further.
Despite this support, Bitcoin struggled to breach its short-term resistance, hinting at a cautious approach from traders who are awaiting more definitive signals.
Ethereum Demonstrates Slight Outperformance with Positive Structure
Ethereum (ETH) exhibited a more pronounced reaction compared to Bitcoin, closing approximately at $3,335. Its RSI has moved to around 58, reflecting a strengthening bullish momentum.
Source: TradingView
Ethereum’s gains can be attributed to:
- Anticipations of greater beta performance should liquidity conditions improve.
- Recent increases in whale accumulation noted earlier in the week.
- A more robust technical recovery structure when compared to Bitcoin.
As liquidity potentially rises in January, Ethereum may present itself as a higher-volatility trade in the macro environment.
Market Summary: Constructive Yet Cautiously Optimistic
In summary, the market’s reaction can be encapsulated as follows:
- A positive but measured response to the Fed’s initial rate reduction.
- Both the crypto market cap and altcoins rose, but without impulsive movements.
- Bitcoin showed signs of stabilization, while Ethereum displayed early strength.
- Traders remain cautious, keenly awaiting confirmation on whether this rate cut indicates the start of a comprehensive easing cycle for 2026.
Should the forthcoming labor and inflation data encourage the Fed to consider further cuts, the crypto market might experience a more robust macro-driven rally. Presently, while sentiment is on the upswing, it has not reached euphoric levels.
Concluding Remarks
- The market’s response to the first Fed rate cut has been steady, indicating a welcoming attitude towards easing.
- Both Bitcoin and Ethereum retained their gains post-FOMC meeting, with broader market caps climbing higher, reflecting a cautious but optimistic outlook.
