Three cuts, three dumps: Why Bitcoin falls every time the Fed eases rates

Bitcoin continues to exhibit a similar behavior pattern following each of the three recent interest rate cuts by the US Federal Reserve (Fed). Analysts note that each rate cut is followed by a sharp drop in cryptocurrency prices, followed by a delayed recovery. In this article, we will examine the reasons for this behavior in Bitcoin and its reaction to changes in monetary policy.

Fed Rate Cuts and Their Impact on Bitcoin

The US Federal Reserve has cut interest rates three times in the past three months, reducing its target range from 4.25%+ to 3.50%-3.75%. Each of these cuts had the same short-term effect: markets reacted to the news with selling.

Decline Pattern

1. September 17, 2025: Following the rate cut, Bitcoin fell sharply, but a few weeks later, the price rose to a new all-time high.
2. October 29, 2025: The trend repeated itself—the price fell again after the rate cut and continued to decline until it found support near $83,000.
3. December 10, 2025: After the latest rate cut, Bitcoin briefly rose but then quickly fell to $89,500. At press time, BTC is trading above $92,000, up 2% over the past 24 hours.

Trader Behavior and Market Sentiment

According to data from analytics firm Santiment, this behavior has become typical for the market. Traders often buy on rumors and sell on news, waiting for retail fears to subside before attempting another recovery. This creates cycles in which the Bitcoin price fluctuates in response to changes in economic policy.

Bitcoin's Maturity and Its Market Position

Jurien Timmer of Fidelity noted that Bitcoin is in the mature, slower phase of its cycle. While earnings remain strong and overall market sentiment is improving, Bitcoin stands out as a weak performer compared to other assets such as silver and gold. This may indicate that the cryptocurrency is still searching for its true value in a changing economic landscape.

In Conclusion

Thus, Bitcoin's reaction to the Fed's rate cuts demonstrates the complex relationship between monetary policy and cryptocurrency market behavior. A price drop following rate cuts may be related to trader psychology and overall market sentiment. It is important to monitor further Fed policy changes and their impact on the cryptocurrency market to better understand the price dynamics of Bitcoin and other digital assets.