- Bitcoin repeated the same pattern after all three Fed cuts.
- Analysts note a fast drop followed by a delayed rebound after a cut.
- BTC is in a mature and slower phase, according to Fidelity’s Jurrien Timmer.
The US Federal Reserve has cut interest rates three times in three months, lowering the target range from 4.25%+ down to 3.50%-3.75%. Each cut came with the same short-term effect, i.e., markets sold the news.
On September 17, Bitcoin dropped sharply before bouncing toward a fresh all-time high weeks later. On October 29, the pattern repeated as price dropped after the cut and moved lower until it found support near $83,000.
Related: Bitcoin Price Prediction: Symmetrical Triangle Tightens As $77M ETF Outflows Keep Bulls On Edge
The latest cut on December 10 produced the same reaction as Bitcoin rose briefly, then fell quickly to $89,500. However, at press time, BTC is trading above $92K, up more than 2% in the past 24 hours.
Santiment said that this behavior has now become typical. Traders buy the rumor, sell the news, and then wait for retail fear to fade before the next recovery attempt.
Bitcoin Cycle Shows Signs of Maturity
Fidelity’s Jurrien Timmer discussed a confused market heading into year-end. Earnings remain strong, sentiment has improved, and the Fed is now accommodative.
Yet Bitcoin stands out as the underperformer this year, with silver and gold dominating capital inflows.
Timmer explained that each major growth phase for BTC since 2010 is weaker in size but longer in duration. The bull market that began near $16,000 in 2022 has now matured massively.
Timmer said that the current pullback does not confirm a new winter, but it indicates that the network is developing in a steadier cycle.
Why Is the Fed Cut Also a Warning Signal?
Analysts at Swissblock argued that rate cuts are not always bullish signals. Historically, the Fed lowers rates when the economy is slowing and risks are increasing.
The current cuts come as unemployment begins to rise and as the bond market shows signs consistent with a recession setup.
Swissblock explained that true soft landings are rare, and the conditions today do not match the last successful example from the mid‑1990s.
Yield curves have inverted, unemployment is climbing, and the Fed is now purchasing $40 billion in treasuries each month to support liquidity. These steps do not align with a healthy economic backdrop.
According to Swissblock, a recession would create pressure across risk assets in the short term, even if Bitcoin eventually benefits under the pro-crypto regime of President Donald Trump.
Related: Tokenized Gold and Silver Outperform Bitcoin This Year as Safe-Haven Demand Increases
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Source: https://coinedition.com/three-cuts-three-dumps-why-bitcoin-drops-every-time-the-fed-eases/