Bitcoin (BTC) dipped back below $90,000 on Thursday, despite the U.S. Federal Reserve’s anticipated quarter-point rate cut. Analysts at Bull Theory attribute the decline to several converging factors.
The rate cut had been widely expected, with markets pricing in a 95% probability weeks in advance. In the lead-up, many investors positioned for Fed liquidity support, boosting Bitcoin’s price. However, once the cut and a plan for $40 billion in monthly Treasury bill purchases were confirmed, large investors, or “whales,” began taking profits.
Market sentiment was further dampened by Fed Chair Jerome Powell’s press conference, where he noted ongoing labor market weaknesses and inflation concerns. The Fed’s projections also suggested only one more rate cut might occur in 2026.
Adding to the pressure, Oracle’s disappointing earnings report after the market close missed revenue estimates. Its stock fell over 11% in after-hours trading, dragging down U.S. stock futures on fears the AI boom might be slowing. This anxiety spilled over into the cryptocurrency market.
In essence, the sell-off stemmed from the rate cut being already priced in, preemptive liquidity trades, and Powell’s lack of a strong signal for further easing.
Despite the downturn, Bull Theory analysts view this as a market overreaction rather than a fundamental shift. The Fed has now cut rates three consecutive times and plans to inject liquidity through T-bill purchases. Powell also indicated further hikes are unlikely and maintained solid growth forecasts for next year.
While job gains may have been overstated, suggesting a softer labor market, this could give the Fed more room to ease policy if needed. The analysts believe current asset declines are driven by unmet high expectations, not deteriorating fundamentals.
Looking forward, they expect more favorable liquidity conditions for Bitcoin and crypto in 2026, contrasting with the outlook for 2025.
At the time of writing, Bitcoin has recovered to above $91,100 amid increased volatility. The cryptocurrency remains 26% below its all-time high of $126,000 set in October.
Frequently Asked Questions
FAQs Bitcoins Drop Below 90000 Despite Positive FOMC Outlook
BeginnerLevel Questions
Q1 What does FOMC stand for and why is it important for crypto
A1 FOMC stands for the Federal Open Market Committee Its the part of the US Federal Reserve that sets interest rates Its decisions impact the entire financial market including crypto because they influence investor sentiment the value of the US dollar and how much risk people are willing to take
Q2 If the FOMC outlook was positive why did Bitcoins price fall
A2 A positive FOMC outlook is generally good for riskier assets like Bitcoin However crypto prices are influenced by many factors at once In this case other negative pressureslike large selloffs regulatory news or technical market correctionssimply outweighed the positive FOMC news
Q3 What is a market slip or correction in crypto
A3 A slip or correction is a shortterm price decline often between 1020 following a period of significant gains Its a normal and healthy part of any market cycle as prices cant go up forever without some pullbacks
Q4 Could this drop mean Bitcoin is in a longterm downturn
A4 Not necessarily A single drop below a psychological level like 90000 doesnt define a longterm trend Bitcoin has a history of sharp corrections during broader bull markets Longterm direction depends on adoption regulation and macroeconomic trends over months and years
Q5 As a beginner whats the main takeaway from this event
A5 The main takeaway is that cryptocurrency markets are highly volatile and react to a complex mix of news Dont expect a single piece of good news to always drive the price up immediately Always be prepared for sudden swings
Intermediate Advanced Questions
Q6 What specific factors other than the FOMC likely contributed to this drop
A6 Several factors could be at play
ProfitTaking Traders selling after a rally to lock in gains