Yesterday I watched the Fed announcement live, popcorn in hand, fully expecting the usual post-rate-cut party in crypto. Twenty-four hours later Bitcoin is flirting with $89,800, half a billion dollars got wiped out in liquidations, and the entire market looks like it just got ghosted after a perfect first date.
Welcome to another classic case of “be careful what you wish for” in crypto.
The Fed Delivered – And the Market Threw It Back
Let’s start with the facts. On December 10 the Federal Reserve cut the federal funds rate by 25 basis points, bringing the range to 3.50%–3.75%. Markets had priced in an 89% probability of exactly this move. In theory, lower rates should be rocket fuel for risk assets like Bitcoin and altcoins.
Yet here we are on December 11 with the total crypto market cap down roughly 3% to $3.1 trillion. Bitcoin shed almost 3%, Ethereum more than 3.5%, and many mid-caps are nursing 7–11% haircuts. So what gives?
The “Hawkish Cut” That Nobody Saw Coming
Jerome Powell’s press conference was the real killer. While he delivered the cut, his tone was anything but celebratory. Inflation is still running hot at 3.2%, November jobs data was anemic, and the dot plot now shows only one additional cut projected for the entire 2026 calendar year.
“We’re not on any preset course.”
– Jerome Powell, Dec 10 press conference
Translation: don’t get too excited, kids. That single sentence flipped the narrative from “rate-cut cycle beginning” to “maybe we’re almost done cutting.” Bond markets reacted instantly – the 10-year Treasury yield jumped 5 basis points to 4.25%, effectively tightening financial conditions the very same day the Fed tried to loosen them.
Carry Trades Unwind and Yen Strength Adds Fuel
Over in Japan the plot thickened. The 2-year JGB yield climbed above 1% for the first time in a decade. That might sound boring until you remember that a huge chunk of crypto leverage over the past two years has been funded by borrowing cheap yen and buying higher-yielding assets (hello Bitcoin).
When the yen carry trade becomes expensive, those positions get unwound fast. We saw the exact same dynamic in August 2024 when the “Yen shock” triggered a $1 billion-plus liquidation cascade. History doesn’t repeat, but it definitely rhymes.
Liquidation Heatmap Tells the Story
Derivatives took it on the chin. CoinGlass clocked $519 million in total liquidations over the past 24 hours, with roughly $370 million of that coming from long positions. Open interest dropped 1.7% to $131 billion – classic deleveraging behavior.
| Asset | 24h Change | Price (Dec 11) | Liquidations |
| Bitcoin (BTC) | -2.6% | $90,131 | $148M |
| Ethereum (ETH) | -3.7% | $3,196 | $112M |
| XRP | -3.9% | $2.01 | $42M |
| Uniswap (UNI) | -7.1% | $5.33 | $18M |
| Polkadot (DOT) | -8.2% | $2.06 | $9M |
| Solana (SOL) | -6.1% | $130.78 | $67M |
The usual suspects – perpetual futures on Binance, Bybit and OKX – saw the heaviest wiping. Anyone who aped in at $94,000 yesterday morning is probably staring at a margin call right now.
Sentiment Back in the Freezer
The Crypto Fear & Greed Index ticked up slightly to 29 but remains firmly in “Fear” territory. That’s actually an improvement from the mid-20s we saw last week, but it tells you everything about how quickly euphoria evaporated.
I’ve been around long enough to know that when the index is below 30 in December, Santa rallies become a lot less likely. Thin holiday liquidity plus scared money rarely equals moonshots.
Where Do the Charts Say We’re Headed Next?
Standard Chartered just cut their year-end Bitcoin target from $125,000 to $100,000, calling yesterday’s decision a clear “hawkish cut.” They see the next major support zone between $88,000 and $84,000 – exactly where the 50-day EMA and previous range lows converge.
- $88,000 – psychological level + volume profile support
- $84,000–$85,000 – November breakout retest zone
- $80,000 – 100-day EMA and worst-case bear target
Below $84,000 things start looking ugly fast. That’s where the CME gap sits and where many analysts would start talking about a proper macro top being in. Personally I think we hold $84K even in a deeper correction, but never say never in crypto.
Silver Linings (Because There Are Always Some)
Not everything is doom and gloom. Spot demand remains reasonably healthy – Coinbase premium is still positive and ETF inflows haven’t reversed yet. Long-term holders continue to sit tight; exchange balances are near multi-year lows.
More importantly, the macro backdrop for 2026 hasn’t actually changed that much. We still have a pro-crypto administration coming in, still have nation-state adoption stories brewing, and still have institutional allocation mandates that need filling. A 10–15% pullback after a 130% yearly move is normal digestion, not the apocalypse.
What I’m Watching Over the Next Week
- How Treasury yields behave – if the 10-year pushes toward 4.5%, risk assets stay under pressure
- Whether Bitcoin can reclaim the $92,000–$93,000 zone before Christmas
- Funding rates – they’re already resetting negative on most exchanges, which usually precedes bounces
- Any surprise comments from Trump’s team on crypto policy timing
Bottom line? My gut says we chop sideways to down into year-end, scare the tourists, then ramp hard in Q1 when the new administration actually starts doing things. That script has played out before.
Until then, zoom out. $90,000 Bitcoin in December 2025 is still an insane win from where we were a year ago. The game is still very much on – just maybe with a bit less leverage and a lot more patience required.
Stay safe out there.
