Bitcoin jumps to $94,000, but 'hawkish' Fed cut threatens crypto rally

Core Insights - 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] Market Expectations - The market anticipates 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] Analyst Perspectives - Investment analyst Nic Puckrin suggests that a hawkish speech from Powell could reduce the chances of a Bitcoin rally, predicting that Bitcoin may end 2025 below $100,000 despite recent purchases by Michael Saylor's Strategy [3][4] - Puckrin believes that a rebound in the crypto market could occur once President Trump announces a replacement for Powell, with Kevin Hassett seen as a favorable candidate for the industry [4] Current Market Conditions - Bitcoin has struggled to recover after a significant drop from its October high of approximately $126,000 [4][8] - Analysts from Compass Point express caution regarding chasing breakouts as Bitcoin trades near the high end of its recent range of $81,000 to $94,000 [5] - Recent buyers of Bitcoin have a cost basis of around $103,000 per token, leading to a tendency to "sell the rip" rather than "buy the dip" when prices fall below this level [6] Yearly Performance - Bitcoin has declined by 2% year-to-date, positioning it for its worst annual performance since the 2022 crypto winter, which saw a loss of over 64% [7] - The token is diverging from stock market performance for the first time since 2014, as the S&P 500 has gained 16% [7]