Bitcoin jumps to $94,000, but ‘hawkish’ Fed cut threatens the crypto rally

Core Viewpoint - Bitcoin (BTC) has risen above $94,000, but strategists are cautious about a potential year-end rally due to expectations of a Federal Reserve rate cut and a possible pause in future policy easing [1][2]. Group 1: Federal Reserve Impact - Markets anticipate a 25-basis-point rate reduction from the Federal Reserve at the end of its two-day policy meeting [2]. - There are increasing bets that Fed Chair Jerome Powell's remarks post-meeting may indicate a pause in January, as policymakers aim to balance inflation control with a cooling labor market [2]. Group 2: Analyst Perspectives - Investment analyst Nic Puckrin suggests that if Powell delivers a hawkish speech, the chances of a year-end rally for Bitcoin will decrease [3]. - Puckrin also notes that Bitcoin's momentum has not been favorable recently, and it may end 2025 below $100,000 despite recent purchases by Michael Saylor's Strategy [3]. - Puckrin expects a rebound in the crypto market once President Trump announces a replacement for Powell, with Kevin Hassett being a leading candidate viewed as industry-friendly [4]. Group 3: Market Performance - Bitcoin has struggled to recover after a significant drop from its October high of approximately $126,000 [4][9]. - Analysts from Compass Point express caution regarding chasing breakouts as Bitcoin trades near the high end of its recent $81,000 to $94,000 range [5]. - Buyers who purchased Bitcoin in the last six months did so at an average cost basis of around $103,000 per token, leading to a tendency to "sell the rip" when prices fall below this level [6]. Group 4: Yearly Performance - Bitcoin has declined by 2% so far this year, positioning it for its worst annual performance since the 2022 crypto winter, which saw a loss of over 64% in value [7]. - The token is diverging sharply from stock performance for the first time since 2014, as the S&P 500 has gained 16% [8].