The Federal Reserve acts as scheduled, but Bitcoin's decline accelerates! When will this wave of structural selling finally end?

Thursday in the Asia session, Bitcoin faces a double dilemma. On one hand is the “positive” news of the Federal Reserve cutting interest rates by 0.25%, and on the other hand, the price is accelerating downward, briefly breaking below the $90,000 mark, with a low of $86,420. Currently, the coin price is oscillating around $87,760, with a 24-hour decline of -0.02%. Ethereum is also under pressure, quoted at $2,950, down -0.80%. Ripple and Solana also failed to escape, falling -0.95% and -1.06% respectively.

What signals are hidden behind this “decoupling” phenomenon?

Policy Uncertainty Looms Over the Market

The Fed’s rate cut decision on Wednesday was not highly unanimous. Two members voted against the rate cut, and another advocated for a larger cut. In the post-meeting statement, the Fed avoided a clear outlook on rate cuts, instead saying it would “carefully assess” economic data and risk factors. Officials forecast only two rate cuts next year, but internal disagreements have widened, with some even predicting six cuts (each 25 bps).

This internal discord has caused turmoil in the market. Fabian Dori, Chief Investment Officer at Sygnum Bank, pointed out that concerns about a weakening labor market and stubborn inflation have led the Fed to adopt a cautious stance on subsequent rate cuts. The decision was also lacking full employment data support — the November CPI report was delayed until December 18, and ADP data showed a reduction of 32,000 jobs last month, with manufacturing especially weak.

The Fed is essentially caught on a “tightrope”: cutting rates too quickly could exacerbate price pressures from tariffs, while cutting too slowly might lead to an economic recession.

The Next Chair Becomes the “Key”

Trump is scouting for a new Fed Chair. The current Chair, Powell, has a term ending next May. Reports suggest the president’s criteria are straightforward: “Who is willing to cut rates immediately?” Jared Bernstein, head of the Council of Economic Advisers, is widely favored; he has authored a 168-page report on digital asset regulation and is well-regarded in the crypto community. Investment bank Compass Point analysts even believe that a Fed Chair supportive of cryptocurrencies could accelerate blockchain integration into the banking system.

On the prediction platform Myriad, traders give a 73% probability that Hasset will be nominated before March next year.

Trump has been pressuring Powell for a long time, and last week, he criticized him as a “bad Fed Chair” during an economic speech in Pennsylvania. Political variables stacking with policy uncertainty have caused market concern.

Bitcoin Swamped by Structural Selling Pressure

This is the core issue. Since early October, Bitcoin has experienced weeks of continuous selling, with a major liquidation event wiping out about $19 billion in leveraged positions. Even as Asian stocks and Wall Street rallied on Thursday, stimulated by the Fed’s rate cut, crypto traders’ sentiment remained bleak.

Sean McNulty, Head of Asia-Pacific Derivatives Trading at FalconX, explicitly stated: “This is a clear decoupling.”

Even Microstrategy, a Bitcoin asset management firm, bought a large amount of 10,624 BTC (worth $962.7 million) from December 1-7, yet this did not push prices higher. “This indicates demand is being overwhelmed by structural selling pressure,” McNulty added.

He pointed out that the next support level is at $88,500, with $85,000 being the “critical bottom line.”

Selling Pressure Signals Are Changing

However, there may be a glimmer of hope ahead. The latest report from CryptoQuant shows that Bitcoin inflows to exchanges have sharply declined from November’s high, with whales reducing their exchange deposits, easing short-term selling pressure.

When Bitcoin first fell below $100,000, whales experienced losses exceeding $600 million, and subsequent estimated losses reached $3.2 billion. Since mid-November, short-term holders have been selling at a loss — a pattern that usually signals a market capitulation, with selling pressure about to dry up.

Nevertheless, QCP warns that current stability should not be mistaken for market strength. ETF inflows have only modestly improved, derivatives positions remain cautious, and the market is still in a wait-and-see mode.

Focus on the Tokyo Decision

The next turning point comes from Japan. The market widely expects the Bank of Japan to raise interest rates by 25 bps on December 19, marking a shift from easing to tightening. Japan’s long-term government bond yields are approaching multi-decade highs, and policymakers have expressed concern over the upward trend.

How will this decision reshape global risk appetite? The market holds its breath.

Technical Outlook: Looking for the Next Support

Bitcoin failed to break through resistance at $94,000 and $94,500. It then retraced downward, breaking below the $92,000 support and crossing the Fibonacci 50% retracement level (around $91,190) as well as the upward trendline at $91,600.

Currently, BTC is trading around $87,760, below the 100-hour simple moving average, approaching support at $89,500 and the Fibonacci 76.4% retracement level.

Bullish Scenario: If bulls regain momentum, short-term resistance is at $91,200. Further breakthroughs could target $91,500 and $92,000. Closing above $92,000 might challenge $92,850 and even $93,500. Major resistance zones remain at $94,000 and $94,500.

Bearish Scenario: If it fails to break above $92,000, a new downward wave could begin. Recent support is at $89,500, with key support near $88,800, and next at the $87,750 zone. A break below could lead to a plunge toward $86,500. The most critical support remains at $85,000 — the watershed to avoid an accelerated decline.

Technical indicators confirm weakness: The hourly MACD is accelerating into a bearish zone, and RSI has fallen below 50, both signaling difficulty in a short-term rebound.

The market is waiting. Waiting for the Bank of Japan decision, waiting for the Fed Chair nomination, waiting for selling pressure to finally exhaust. The future direction of Bitcoin in the coming weeks will be determined by these variables.