Bitcoin (BTC-USD) jumped to hover near $94,000 on Tuesday, but strategists grew cautious of a year-end crypto rally amid growing expectations that the Federal Reserve will cut rates this week while signaling a potential pause in future policy easing.
Markets widely expect the central bank to deliver a 25 basis point rate reduction at the end of its two-day policy meeting on Wednesday. But both the CME FedWatch and Polymarket show growing bets that Fed Chair Jerome Powell's post-meeting remarks could signal a pause in January as policymakers try to balance containing inflation with a cooling labor market.
"If Powell does indeed deliver a hawkish speech, the likelihood of a Santa rally for Bitcoin diminishes," Coin Bureau investment analyst and co-founder Nic Puckrin wrote in a note on Tuesday.
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