Policy developments are crucial to bitcoin’s price behavior in the near-term.
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Bitcoin traders wondering what the digital currency’s price will do next should closely monitor policy developments after the Federal Reserve announced its latest rate cut earlier this week, according to several analysts.
The world’s most prominent cryptocurrency has been fluctuating within a relatively broad range for most of this month, moving between roughly $85,000 and $95,000, according to Coinbase data from TradingView.
The Federal Open Market Committee released its latest statement on the benchmark federal funds rate at 2 p.m. EST on Wednesday, December 10, announcing a widely anticipated 25-basis point reduction that lowered the target range from 350 to 375 bp. The committee also noted that it would begin buying “shorter-term Treasury securities.”
Markets failed to rally following this announcement, as many considered the rate cut a foregone conclusion. Bitcoin prices actually climbed before the Fed released its statement, surpassing $94,000, and then dropped below $90,000 that night, additional Coinbase figures from TradingView indicate.
“The third 25 bps fed interest rate cut of 2025 was one of the poorest kept secrets ever,” Tim Enneking, managing partner of Psalion, stated via email, adding that it was “Completely priced in.”
Katherine Dowling, advisor at Bitwise Asset Management, offered a similar take, noting via emailed commentary that “On the macro front, the most recent interest rate reduction was already priced in, but all eyes are on what this move signals for future decisions and where the Fed may ultimately want to land.”
‘Policy Developments Are Incredibly Important’
For those monitoring the digital currency’s price fluctuations and trying to get a handle on what will happen next, “Policy developments are incredibly important,” the YouTuber who goes by Wendy O said via email.
Other analysts offered similar input, with Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, emphasizing that investors’ expectations of future Fed policy will have a key impact on how the digital currency performs in the near-term.
“Bitcoin’s next move is less about this single Fed cut and more about whether markets buy the story of a shallow easing cycle,” he stated via email.
“If lower real yields and the new liquidity support stick without a real growth scare, that backdrop is still constructive for bitcoin and other high-beta assets,” said DiPasquale.
Gabriel Selby, head of research at CF Benchmarks, also weighed in, focusing on the key role played by the Federal Reserve, but opting to focus on liquidity considerations.
“Bitcoin initially sold off on hawkish guidance from the Federal Reserve, but the more interesting story is the structural shift in the liquidity cycle,” he stated. “Quantitative tightening is over and the Fed is back to buying Treasuries.”
Next Fed Chair Crucial, Says Analyst
Selby also emphasized that “The next Fed chair could significantly alter market expectations. Once Trump announces his pick, that appointee becomes the shadow Fed chair, and markets will start pricing in this individual’s new policy stance well before they take the seat.”
“If it’s someone like Kevin Hassett, expect rate cut expectations for 2026 to shift meaningfully,” he stated, referring to the current director of the National Economic Council of the United States.
Market Structure Bill
Analysts also spoke to pending legislation, specifically the market structure bill that would iron out the exact jurisdiction that both the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission have over digital assets.
In addition to providing the overall crypto space with greater regulatory clarity, the passage of such legislation could trigger an influx of institutional capital, according to Dowling.