Federal Reserve’s conservative rate cut and Powell’s explicit rejection of Bitcoin holdings trigger crypto market selloff. Bitcoin drops 5% as traders face $851M in liquidations amid scaled-back rate cut expectations for 2025.
 
 
 
#Fed ’S MESSAGE: DON’T COUNT ON AGGRESSIVE EASING
 
 
Bitcoin plunged below the psychological $100,000 mark after the Federal Reserve delivered what markets viewed as a hawkish rate cut, lowering its benchmark rate by 25 basis points to 4.25%-4.50%. While the cut itself matched expectations, the accompanying signals from Fed officials painted a far more conservative picture than crypto markets had priced in.
 
The central bank’s latest dot plot threw cold water on hopes for aggressive monetary easing, projecting just two rate cuts in 2025. Adding to the hawkish tilt, officials raised their 2025 inflation forecast to 2.5%, signaling continued vigilance against price pressures.

（Source：FedWatch）
 
 
Fed Chair Jerome Powell further rattled crypto markets by explicitly ruling out any Federal Reserve involvement in Bitcoin accumulation. “We are not allowed to hold Bitcoin, nor are we seeking to change the law,” Powell stated firmly, dashing speculation about potential U.S. government strategic reserves of the cryptocurrency.
 
Powell emphasized the data-dependent nature of future policy moves while highlighting fresh concerns about protectionist policies and expanding fiscal deficits. The measured tone suggested a Federal Reserve in no hurry to pivot toward substantial easing.
 
 
 
 
#Crypto🚀🚀 MARKETS REEL FROM DOUBLE BLOW
 
 
 
The hawkish surprise sent Bitcoin plummeting to $99,719.65 early Thursday, down more than 5% from recent highs of $108,000. The selling pressure rippled through the crypto ecosystem, hitting all major digital assets.
 
The decline marked a sharp reversal from the optimism that had propelled Bitcoin higher following Donald Trump’s November 5 presidential election victory. Markets had been pricing in expectations of crypto-friendly policies, including speculation about a strategic Bitcoin reserve potentially incorporating 200,000 Bitcoins from criminal seizures. Powell’s explicit rejection of Fed involvement in such plans sparked a broad sell-off.
 
The carnage left a trail of liquidated positions in its wake. Data from Coinglass revealed 293,887 traders facing liquidation in just 24 hours, with total liquidation volume hitting $851 million.
 

（Source：Sosovalue）
 
Crypto event traders and market makers rushed to reduce risk exposure as expectations for 2025 rate cuts were scaled back.
 
“The market had gotten ahead of itself with rate cut expectations,” noted David Lawant, head of research at crypto prime broker FalconX. While Bitcoin’s correlation with major stock indices has declined, Lawant suggested the slower pace of anticipated rate cuts would continue pressuring risk assets in the near term.
 

（Source：Tradingview）
 
 
 
 
POLICY ENVIRONMENT WEIGHS ON CRYPTO SENTIMENT
 
 
 
The Fed’s cautious stance toward easing monetary conditions presents a particular challenge for crypto markets. Bitcoin has historically thrived in loose monetary environments but often struggles when liquidity conditions tighten.
 
Previous enthusiasm about the Trump administration potentially backing a strategic Bitcoin reserve had fueled bullish sentiment. However, Powell’s comments highlighted deeper uncertainties in the policy landscape, intensifying investor concerns about the path forward.
 
The situation also raises questions about Bitcoin’s reputation as “digital gold” and an inflation hedge. The Fed’s heightened focus on inflation risks could undermine this narrative, at least temporarily.
  
 
MARKETS EYE KEY SUPPORT LEVELS
 
 
Traders are now watching whether Bitcoin can hold critical support around $99,000. A decisive break below this level could trigger further technical selling. Other major cryptocurrencies face even greater volatility risks as the market digests the Fed’s message.
 
For longer-term investors, however, the current pullback may offer attractive entry points. Previous episodes of Fed-induced selling have often preceded strong recoveries, particularly in undervalued assets within the crypto ecosystem.
 
The key moving forward will be monitoring not just Fed policy and economic data, but also shifts in institutional sentiment, derivatives market positioning, and potential regulatory developments that could influence crypto market dynamics.
 
The Fed’s latest signals suggest crypto markets face a period of adjustment as expectations reset. While near-term pressure seems likely, Bitcoin and the broader digital asset space retain their long-term growth potential.
 
The current volatility serves as a reminder that crypto markets remain highly sensitive to monetary policy shifts. Successful navigation of this environment will require careful attention to both technical and fundamental factors as the market searches for a new equilibrium.
 

BINANCE SURVEY: #memecoin🚀🚀🚀 HOLDERS OUTNUMBER BITCOIN HOLDERS
 
 
 
On December 19, Binance released the results of its latest user survey, revealing that the number of meme coin holders has surpassed that of Bitcoin holders among cryptocurrency owners.
 
The survey, part of Binance’s “Global User Survey,” was conducted on over 27,000 users across Asia, Australia, Europe, Africa, and Latin America. The survey found that 16% of respondents held meme coins, making them the most held cryptocurrency, while 14.44% held Bitcoin.
 
Analysis: 
 
The rising popularity of meme coins appears closely connected to market sentiment and speculative interest. Many investors’ involvement in meme coins stems primarily from potential short-term market movements and social factors, rather than technological fundamentals.
 
For instance, Dogecoin’s prominence has been significantly influenced by social media trends and high-profile endorsements.
 
For market participants, these assets can present opportunities during periods of strong market momentum, particularly in bull markets or during rapid price movements. However, investors focused on long-term value creation may find greater alignment with assets that demonstrate stronger fundamental characteristics, such as Bitcoin.
 
 
Please read carefully：
Top Memecoins 2024: What You Need to Know
 
 
 
 
 
POWELL: FEDERAL RESERVE’S POSITION ON #Bitcoin❗ HOLDINGS REMAINS UNCHANGED
 
 
 
On December 19, Federal Reserve Chairman Jerome Powell clarified that the Federal Reserve is not authorized to hold Bitcoin and expressed no intention to pursue changes to the relevant regulations.
 
Analysis:
 
This statement reflects the consistent approach of U.S. monetary authorities toward digital assets. While Bitcoin and other cryptocurrencies continue to gain market recognition, Powell’s statement suggests the Federal Reserve maintains its focus on traditional financial system stability and prudent management of potential risks associated with cryptocurrency adoption.
 
 
Please read carefully：
Why Have Nations Been Reluctant to Include Bitcoin in National Reserves?
The Singapore Government Warns of Cryptocurrency Theft Risks: How to Protect Your Crypto Assets?
 
 
 
 
 
#Fed ’S STANCE ON RATE CUTS IMPACTS CRYPTO MARKETS: BITCOIN AND OVERALL MARKET CAP SEE DECLINE
 
 
 
On December 19, following Federal Reserve Chairman Powell’s announcement of projected interest rate adjustments for 2025, cryptocurrency markets experienced notable price movements.
 
The announcement, which indicated fewer rate cuts than market expectations, coincided with Bitcoin experiencing a 5.6% decline. Ethereum saw a decrease of 6.96%, while other cryptocurrencies including Dogecoin and Solana also recorded significant downward movements.
 
 
Analysis: 
 
The cryptocurrency market’s price volatility presents both opportunities and challenges for investors. While experienced traders may find opportunities in short-term price movements, market participants should consider implementing risk management strategies.
 
These might include portfolio diversification, careful position sizing, and maintaining awareness of broader economic indicators that could influence market dynamics.