Bitcoin and Ethereum Under Pressure: Fed Communication Dampens Crypto Markets

Bitcoin Corrects After Failed Breakout Attempt

The crypto market is showing weakness as the year draws to a close. Bitcoin temporarily fell to $89,600 on Friday evening after a breakout attempt at $94,500 failed ^[2]. On Saturday, the price climbed back to $90,500, but is still trading 1.9 percent lower than the previous day ^[2].

Earlier in the week, Bitcoin had briefly reached $94,330, driven by a $962 million Bitcoin purchase by Strategy, the company's largest investment since mid-2025 ^[1].

Fed Rate Cut Falls Flat

The main culprit behind the current weakness is the U.S. Federal Reserve's communication. Fed Chair Jerome Powell announced the expected 25 basis point reduction in the U.S. benchmark interest rate, but simultaneously stated that rates are now "plausibly close to the neutral range" ^[2]. This suggests that another rate cut in January may not materialize, meaning the rate range could remain at 3.5 to 3.75 percent in the short to medium term ^[2].

According to market expert Stefan Lübeck, interest rate futures are now pricing in this possibility with a probability of 78 percent ^[2]. CoinEx analyst Jeff Ko described the rate cut as having little upward momentum, as it had "already been priced in" ^[1].

Ethereum and Trading Volume Collapse

Ethereum was hit even harder: The ETH price stands at $3,120 and lost 3.8 percent over the same period ^[2]. XRP, on the other hand, maintained its position and rose slightly by 0.3 percent to $2.03 ^[2].

A report from Bitfinex also shows that spot trading volumes have collapsed by 66 percent – a phenomenon that, according to the exchange, frequently occurs before the next phase of a market cycle ^[1].

Technical Analysis: Critical Support Zones in Focus

After a cycle high near $126,230, Bitcoin has entered a downtrend within a falling channel pattern ^[3]. The selloff accelerated after the price lost the region between $108,000 and $110,000, where the 200-day Simple Moving Average had previously provided dynamic support ^[3].

The support zone between $85,000 and $90,000, which aligns with the 0.618–0.786 Fibonacci retracement levels, has been able to absorb demand so far ^[3]. The Relative Strength Index currently sits at 44, indicating a consolidation phase ^[3].

Analysts Expect Heightened Volatility

Despite the current weakness, some market observers see signs of a possible trend reversal. Analyst Michaël van de Poppe noted a narrowing price structure for Bitcoin in a post on X and stated: "Bitcoin is holding above this critical level, but I'm confident we'll see a significant increase in volatility in the coming days" ^[1].

Van de Poppe identified key levels at $89,000 and $92,000. A breakthrough above resistance could accelerate a move toward $100,000 before 2026, while losing support risks a retest of lower levels ^[1].

Should Bitcoin break above the falling channel and reclaim the $100,000 mark, the next upside target would be $106,000 to $109,000 ^[3]. If the current recovery fails, the price could retest the $85,000 support zone ^[3].