Yesterday the Federal Reserve cut rates by 25 bps for the third meeting in a row, and for a moment it felt like crypto was ready to run.
The Bitcoin price shot toward $94,044, Ethereum climbed near $3,433, and the timeline lit up like it always does when the market finally shows some life. But just as quickly as the rally appeared, it faded – and a lot of traders ended up buying right into a trap.
Even though the macro backdrop turned more supportive, the reaction from retail once again played out the same familiar pattern.
The cut itself wasn’t a surprise. Polymarket traders had already priced it in long before Jerome Powell began speaking. Rate cuts tend to weaken the dollar and support assets like BTC and ETH, so retail jumped in early expecting a bigger move.
But beneath all the noise, something very different was unfolding. A single whale dumped roughly $100M in BTC within an hour – a move big enough to shake the market even if most retail traders didn’t notice or didn’t want to. It created some panic, but most retail traders ignored it and kept buying the first big move up.
The result was immediate. BTC and ETH pushed up fast, sentiment surged, and then both coins rolled over almost as quickly as they climbed. It was a classic “buy the rumor, sell the news” setup – and whales executed it perfectly.
🚨 BREAKING:
— ᴛʀᴀᴄᴇʀ (@DeFiTracer) December 10, 2025
BINANCE DUMPING MILLIONS OF $BTC AHEAD OF FOMC MEETING
THEY SOLD $100M $BTC IN AN HOUR AND KEEP SELLING MORE
WHAT DO THEY KNOW?? 👀 pic.twitter.com/8yT858niX6
What you'll learn 👉
Why the Market Reaction Fell Flat
When Jerome Powell stepped up to the mic, nothing surprising came out of it. The Fed still sees steady growth, inflation still sitting above where they want it, and they’re keeping the same “wait and see” approach for whatever the next batch of numbers brings. But one detail changed the tone.
Back in October, the Fed planned to slow the pace of balance sheet reductions starting Dec. 1. By the Dec. 10 meeting, it said bank reserves had fallen too far and it would start buying short-term Treasury bills again to stabilize liquidity.
JUST IN 🚨: Federal Reserve cuts interest rate by 25 bps 🥳🫂 pic.twitter.com/Dm36bfw0VG
— Barchart (@Barchart) December 10, 2025
In theory, this shift should help crypto – more liquidity usually does. But sentiment didn’t behave the way traders expected.
The ETH price showed it clearly. As soon as it hit around $3,433, social sentiment spiked almost entirely positive. But minutes later ETH dropped toward $3,170, trapping the traders who jumped in last.
BTC followed the same script, just less aggressively.
Bitcoin and Ethereum Still Lag Behind Traditional Markets
Part of the hesitation comes from how far crypto has fallen behind other major markets this year. BTC is still -3.6% YTD, while the S&P 500 is up +17.6% and gold has surged +61.1%. Crypto simply didn’t join the late-2025 rebound, so traders remain cautious.
But at the same time, this gap creates a real opportunity. Historically, when liquidity turns and crypto lags behind equities, the BTC price often “catches up” quickly once sentiment resets. With three straight rate cuts now confirmed, that window finally looks possible again.
Read Also: XRP Is Becoming Invisible Bank Infrastructure, But Retail Isn’t Noticing
Despite the noisy swings, larger wallets have been quietly stepping back in. Addresses holding 10–10,000 BTC have added more than 42,565 BTC since Nov. 30. Retail, meanwhile, has been reacting to every sharp move and every headline, often buying at the wrong moments.
When price rises while smart money accumulates and leverage stays stable, the groundwork for a stronger trend begins to form. That’s exactly what the early signs are showing.
Heading Into 2026 With a Very Different Backdrop
This final rate cut of 2025 does more than wrap up the year – it resets the macro environment going into 2026. The Fed has now delivered three consecutive cuts, softened its stance on economic risks and turned toward supporting liquidity rather than draining it.
That doesn’t guarantee a straight path higher for crypto, but it does give the market breathing room it desperately lacked earlier in the year.
Volatility will still show up. Whales will still set traps. Retail will still chase the fastest candles. But compared to mid-2025, the setup is far healthier now.
If inflation keeps drifting toward target and economic data holds steady, crypto may finally have the conditions it needs for a stronger year ahead.
For now, the real takeaway is simple: the cut was expected – the reaction wasn’t – and once again, the traders who rushed in first paid the price.
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