Bitcoin soars to $94,000, beware of the Federal Reserve's "hawkish" rate cuts quenching the rally

In the early morning, global cryptocurrency market investors’ eyes are focused on Washington, where the Federal Reserve will announce its last interest rate decision of the year on December 10th local time (early morning December 11th Beijing time).

The market almost unanimously expects the Federal Reserve to cut interest rates for the third consecutive time, lowering the federal funds rate target range by 25 basis points. However, investors are more concerned that this could be a “hawkish rate cut” — meaning a rate cut while signaling a potential pause in easing in the future.

As of December 10th, Bitcoin’s price experienced sharp fluctuations, reporting $93,020.42, up 2.63% in 24 hours.

01 Market Dynamics: Bitcoin Returns to High Levels, Volatility on the Eve of Rate Cuts

Bitcoin experienced typical “pre-decision volatility” on December 10th. Market data shows that Bitcoin’s price briefly dipped below $92,000 before quickly rebounding and breaking above $93,000.

The overall sentiment in the crypto market is complex. On one hand, the probability of a rate cut is estimated at 87%, higher than less than 67% a month ago. On the other hand, fears have led to large liquidations; as of press time, over 110,000 traders have been liquidated across the crypto network, evaporating about 3 billion RMB.

This volatility reflects market divisions. According to predictions from Polymarket, traders now see a 40% chance that “Bitcoin will rise again to $100,000 this year.”

At the same time, there is a 24% chance that it will fall below $80,000. The market swings between hope and caution.

02 Policy Dilemma: What Exactly Is a “Hawkish Rate Cut”?

The market’s vigilance over a “hawkish rate cut” stems from lessons learned in October. At that time, the Fed cut rates by 25 basis points and paused balance sheet reduction — a dovish combination — but Chairman Powell dampened expectations during the press conference.

He repeatedly emphasized that a December rate cut is “by no means a certainty,” and publicly acknowledged internal disagreements within the committee, leading to the dollar and U.S. Treasury yields rising instead of falling, with risk assets quickly losing gains.

Now, the Fed faces an even more complex situation. Internally, there is high division: some members worry about a softening labor market, while others focus on core inflation still above 2%.

Adding to the difficulty, the U.S. government shutdown has delayed key employment and inflation data for November, forcing the Fed to make decisions with incomplete information.

“This forces the Fed to walk a tightrope,” said Dianne Swank, Chief Economist at KPMG.

03 Scenario Analysis: The Fates of the Crypto Market Under Three Paths

This meeting could lead the market down three very different paths, each with different outcomes for Bitcoin and crypto assets.

Baseline Scenario (Highest Probability)

Interest rates are cut by 25 basis points as expected, but the dot plot remains conservative regarding rate hikes in 2026, with Powell continuing to emphasize “no preset path.” The market may celebrate the rate cut in the short term, with Bitcoin trying to retest previous highs, but sustainability will be tested, likely leading to high-level consolidation.

Dovish Surprise (Lower Probability)

In addition to the rate cut, the dot plot significantly revises down the mid-term rate median, implying room for further easing in 2026. This would constitute a double benefit from “interest rate + liquidity.” If Bitcoin can stabilize near $90,000, it may attempt to challenge the psychological $100,000 barrier again.

Hawkish Shock (Lower Probability but Impactful)

The Fed may hold steady or sharply reduce future rate cut expectations via the dot plot, clearly signaling “higher rates for longer.” This would strengthen the dollar and pressure all assets without cash flow. In this context, with ETF inflows already slowing, Bitcoin could face downward pressure seeking new support levels on technical grounds.

04 Institutional Shift: Standard Chartered Downgrades Forecast, Market Drivers Change

On the eve of the meeting, institutions’ expectations for Bitcoin have quietly shifted.

Standard Chartered recently significantly downgraded its Bitcoin price target, halving the 2025 end-of-year goal from $200,000 to $100,000. Its long-term target of $500,000 remains unchanged, but the timeline has been pushed back from 2028 to 2030.

Analyst Jeffrey Kendrick pointed out that the main reason for the downgrade is changing market demand dynamics. The previously strong corporate treasury hoarding (such as MicroStrategy) phase has essentially ended, and future gains will depend almost entirely on ETF capital inflows.

However, data shows ETF demand has cooled. This quarter, ETF inflows are approximately 50,000 BTC, the lowest since the launch of the US spot Bitcoin ETF, far below the quarterly peak of 450,000 BTC in late 2024.

05 Long-term Concerns: Cycle Model Fails, Market Structure Evolves

A deeper shift lies in market perception. Standard Chartered’s report states outright that the traditional “halving cycle” script may no longer apply — “this time is really different.”

Analysts believe that the “crypto winter” may be a thing of the past. This view has been validated by market forecasts, with only a 6% probability of entering a new crypto winter before the end of February 2026.

This structural change implies increased linkage between Bitcoin and traditional macro factors. As more institutional investors enter, Bitcoin is increasingly following common drivers affecting stocks and other high-risk assets, especially monetary policy.

The strengthened correlation between Bitcoin and US stocks in 2025 has already proven this: from the surge after Trump’s election at the start of the year to the plunge following the April tariffs, both moved in high sync.

Post-Fed Decision Market Outlook

Future Outlook

One hour after the decision, it will be a battlefield of sentiment and algorithmic trading, with candlesticks likely to swing violently. But the true trend usually only becomes clear 12 to 24 hours after Powell’s press conference, once investors have digested all information.

Jeffrey Kendrick of Standard Chartered wrote in his report: “This time is really different.”

He refers to the possibility that the old halving cycle model may have become invalid. When Bitcoin’s price and stock indices synchronized their plunge on tariff news, and the Fed’s meeting became more anticipated than the block reward halving, the market has moved from a fringe experiment to the center stage of the global macro scene.

No matter tonight’s outcome, the crypto market has forever bid farewell to the cycle that once belonged only to itself.