Bitcoin Retreats After Brief Surge Above $94K as Powell Delivers Mixed Fed Signals

Bitcoin (BTC) climbed above $94,000 before quickly reversing course after U.S. Federal Reserve Chair Jerome Powell delivered a balanced but cautious message following the central bank’s 25 basis-point rate cut on Wednesday. BTC traded around $92,000 for most of the day before spiking to $94,400 when Powell highlighted risks tied to a potentially weaker-than-expected labor market. However, the gains faded as he reiterated that the fight against inflation is “far from over,” prompting a swift pullback.

At last check, Bitcoin hovered near $92,000, down roughly 0.8% over the past 24 hours. Meanwhile, Ether (ETH) continued to show resilience, holding above $3,300 and rising about 1.1% during the same period. U.S. equities also advanced, with the Nasdaq up 0.5% and the S&P 500 gaining 0.7%, while the U.S. dollar weakened about 0.6% against major currencies including the yen and euro.

Powell said that interest rates are now “within a range of plausible estimates of neutral,” giving the Fed room to assess future cuts. He stressed that upcoming labor and inflation data ahead of the January meeting will be crucial for shaping policy decisions. Alongside the rate cut, the New York Fed announced plans to purchase up to $40 billion in short-term Treasuries over the next month to ease financial conditions without signaling a full return to quantitative easing. Powell added these elevated purchases may continue for several months, marking a notable shift after years of balance sheet reduction.

Market analysts noted that despite the rate cut, the Fed emphasized caution. Capital.com’s Daniela Hathorn said the move does not signal an aggressive easing cycle, while Fitch Ratings’ Brian Coulton pointed out that recent mild increases in core inflation likely influenced the close decision. Analysts expect only limited additional cuts through mid-2026.

For Bitcoin, 21Shares’ David Hernandez said breaking above the $94,500 resistance remains key. Strengthening spot ETF inflows—boosted by lower capital costs—could push BTC toward the psychological $100,000 level if momentum builds.