Bitcoin is holding above the $92,000 level after rebounding from last week’s decline towards $90,000, giving bulls a brief moment of relief. Yet despite this stabilization, market sentiment remains decidedly bearish, with many traders expecting further declines unless a clear change in momentum emerges. The timing couldn’t be more crucial: the Federal Reserve’s upcoming rate decision has become a central focus for investors, and the market is bracing for increased volatility.
Bitcoin’s historical rate-cutting behavior provides significant context, according to a new CryptoQuant report. Over the years, the Fed’s interest rate cuts have generally aligned with upward movements in BTC, largely because lower rates weaken the U.S. dollar, boost liquidity and support risky assets. However, the report highlights an important nuance: the immediate response is rarely simple.
In several past cases, Bitcoin has rallied before rate cuts, only to show moderate or even negative price action once the decision was announced, indicating that markets had already priced in the decision.
This dynamic creates a layer of uncertainty heading into the FOMC meeting. Although macroeconomic conditions align with Bitcoin’s long-term bullish trends, the near-term outlook remains fragile, shaped by market sentiment, positioning, and anticipation rather than the announcement itself.
Historical trends signal caution ahead of FOMC
According to GugaOnChain’s report on CryptoQuant, Bitcoin’s past reactions to Federal Reserve rate cuts provide a clear framework for understanding risks heading into this week’s FOMC meeting. Historical data paints a picture of mixed and often counterintuitive behavior.
For example, after the 25 basis point cuts in September 2025, Bitcoin barely reacted. In another instance, BTC hit a four-week high, only to drop nearly $2,000 shortly after, settling into a period of moderate stability. These reactions highlight how quickly sentiment can change once policy decisions are fully considered.
Volatility also played a key role. The September and October rate decisions triggered brief rallies before the FOMC, followed by notable declines once the announcements were made. After September’s decline, volatility rose sharply as traders unwound their leveraged positions, revealing how Bitcoin remains sensitive to event-driven positioning.
This leads to the recurring “buy the rumor, sell the news” pattern, a dynamic that GugaOnChain believes could repeat itself. For this reason, it is crucial to monitor market leverage, including funding rates and open interest rates. Liquidity flows, such as foreign exchange reserves and ETF activity, are equally important. Together, these indicators help traders anticipate near-term price movements as Bitcoin prepares for another potentially volatile macroeconomic event.
Testing recovery but still below key trend levels
Bitcoin’s weekly chart shows the market attempting to stabilize above the $92,000 level after a strong multi-week correction from the $120,000 region. The recent rebound from the $89,000-$90,000 area highlights strong demand at the 100-week moving average (green line), which is currently acting as critical dynamic support.
Historically, this MA has served as a structural backbone for Bitcoin during mid-cycle pullbacks, and the latest rebound reinforces its relevance.
However, despite the recovery, BTC remains firmly below the 50-week moving average (blue line), a level that previously marked bullish continuation phases throughout 2024 and early 2025. Until the price reclaims this region – now sitting near $100,000 – the broader market structure is corrective rather than impulsively bullish. The lower highs formed from the top also suggest that the bears still retain control of the medium-term trend.
Volume behavior adds another layer: although buying volume has increased slightly, it remains significantly below the aggressive selling pressure seen during the November-December decline. This indicates that buyers are showing interest, but conviction has not yet fully returned.
Featured image from ChatGPT, chart from TradingView.com
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