Bitcoin falls after Fed’s ‘hawkish cut,’ dimming hopes for a Santa Rally
Bitcoin retreated to around $90,000 on Thursday after the Federal Reserve announced a widely expected 25 basis-point rate cut but paired it with guidance that investors viewed as cautious. The move erased earlier gains, BTC had risen to $94,500 before the meeting, extending a yearlong pattern where seven of the past eight FOMC meetings were followed by price declines. Ether fell below $3,200, and the broader crypto market dipped as altcoins lost value, leaving both BTC and ETH in negative territory for the year.
Powell’s tone: dovish on the surface, hawkish underneath
Fed Chair Jerome Powell acknowledged cooling in the labor market and said the policy rate now sits in “neutral territory.” However, he emphasized that future policy depends on data, with risks still “tilted to the upside” for inflation and unemployment. The 9–3 vote, the largest number of dissents since 2018, signaled internal division. Projections showed only one more cut expected through 2026. Analysts described the move as a “hawkish cut”, a calibrated adjustment rather than a dovish pivot, as the Fed simultaneously raised growth forecasts and trimmed inflation expectations.
Market reaction and liquidity backdrop
Coin Bureau’s Nic Puckrin said the mixed message “injects uncertainty” into risk assets, adding that it’s “not enough to spark a Santa rally for bitcoin.” The Fed also announced it would purchase $40 billion in Treasury bills to maintain liquidity, while insisting the move isn’t quantitative easing. Kraken’s Matt Howells-Barby said the combination of neutral policy and reserve injections could support crypto into 2026 but warned that next year’s voter rotation at the Fed could make policy more hawkish. Paul Howard of Wincent called the move “too small” to push BTC to new highs “this side of Easter.”
ETF inflows strong, but conviction weak
Despite the muted reaction, ETF flows remained positive. U.S. spot bitcoin ETFs saw $224 million in net inflows on Tuesday, led by BlackRock’s IBIT. Ethereum, Solana, and XRP funds also posted gains. Yet prices barely moved, reflecting limited conviction. Timothy Misir of BRN said institutions are still accumulating — smart-money wallets have added over 42,000 BTC since Dec. 1, while retail investors continue to sell into stress. Exchange balances keep declining, reinforcing long-term scarcity, but near-term volatility persists.
Analysts concluded that the Fed’s “hawkish cut” supports bitcoin conditionally, institutional buyers are absorbing supply, but without a clear macro shift, a true rally may have to wait until 2026.
Source: The Block
Ethereum ETFs hit six-week high as institutional rotation broadens crypto exposure
Ethereum exchange-traded funds (ETFs) are seeing renewed momentum as institutional investors rotate within the crypto market. Spot Ethereum ETFs recorded $177.64 million in inflows on Tuesday, reaching a six-week high, according to SoSoValue. That figure surpasses the $151.74 million flowing into spot Bitcoin ETFs the same day, a signal that investors are expanding beyond Bitcoin in their portfolio allocations.
Among other altcoin ETFs, Solana led with $16.54 million in net inflows, while XRP attracted $8.73 million. Funds tied to Dogecoin and Chainlink remained flat.
“ETF flows are telling a clear story,” said Rachel Lin, CEO and Co-Founder of SynFutures, in an interview with Decrypt. “Investors are becoming more selective inside crypto.” Lin added that institutional investors increasingly view Ethereum not only as an asset but as critical financial infrastructure, pointing to the growing popularity of staking-enabled products and the tokenization sector, which have gained significant traction in recent months.
So far, ETF products collectively hold around $21.4 billion worth of Ethereum, equivalent to roughly 5% of ETH’s total market capitalization of $400 billion. Ethereum’s price has risen 6.9% in the past 24 hours, currently trading at $3,329, according to CoinGecko.
Prediction markets are echoing this optimism. On Myriad, traders now assign a 58% probability that ETH will reach $4,500 before dropping to $2,500, up from below 30% earlier this month.
Despite Ethereum’s surge, Bitcoin continues to dominate overall institutional allocations. However, Lin noted that the divergence in ETF flows marks a “structural rotation rather than a short-term trade.” Institutions that initially gained crypto exposure through Bitcoin are now diversifying into Ethereum, broadening their exposure to assets with yield and utility potential.
Looking ahead, analysts remain cautiously optimistic. Matthew Hougan, CIO at Bitwise, called ETFs “phenomenally bullish,” noting that major U.S. financial institutions, Morgan Stanley, Merrill Lynch, UBS, and Wells Fargo, have opened access to crypto ETFs over the past six months. This expansion, he said, grants “trillions of dollars” in client capital new entry points to digital assets.
Hougan expects 2026 to be a record year for ETF flows, while Lin anticipates steady growth as regulatory clarity improves and macro conditions ease, likely driving another wave of demand with Ethereum capturing a larger share of new inflows thanks to its utility and staking yield profile.
Source: Decrypt
XRP transaction fees plunge 89% amid weak price momentum and network activity slowdown
XRP’s on-chain transaction fees have collapsed by approximately 89 percent, hitting levels not seen since December 2020, according to on-chain data from Glassnode. The daily fees paid on the XRP Ledger (XRPL) have fallen from about 5,900 XRP per day in early February to roughly 650 XRP per day, signaling a significant slowdown in network utility and activity.
Experts say this dramatic drop in fees reflects a cooldown in transactional demand on the XRPL and could be a warning sign for the broader market. Lower fees typically indicate fewer transactions and reduced congestion on a blockchain, which in XRP’s case suggests declining participation from users and traders.
This decline in network activity has coincided with other weakening market signals. Futures open interest on XRP has fallen sharply, from 1.75 billion XRP in early October to around 0.74 billion XRP, representing a roughly 59% reduction. Funding rates have also dropped markedly, from 0.01 percent to 0.001 percent (7-day SMA), pointing to less confidence among derivatives traders in an imminent price recovery.
Social sentiment toward XRP has similarly weakened, with the token entering what analysts describe as a “fear zone,” the most negative mood observed since early October. Some market participants note that such sentiment lows have historically preceded strong rallies, but there is no certainty this pattern will repeat.
On the price side, technical analysis shows XRP forming a descending triangle pattern on the daily chart. Should this pattern complete and break below its support near $2, the measured target points to around $1.73, representing an approximate 15 percent downside from current levels. The area between $2 and $1.98 remains a key support zone — holding it could be critical in preventing deeper losses toward $1.61.
Market observers caution that while collapsing fees and weak derivatives metrics could hint at further price declines, prolonged low fees sometimes reflect temporary market inactivity rather than structural breakdown. Some analysts also argue that periods of low on-chain activity and negative sentiment have historically set the stage for rebounds, though timing such reversals remains challenging.
In summary, XRP’s transaction fees have fallen to multi-year lows, accompanied by declining network participation and reduced trader confidence. Technical signs point to potential downside risk if key support levels break, but past patterns suggest that sentiment extremes can precede market recoveries — making the near-term outlook for XRP cautious but not necessarily bearish.
Source: Cointelegraph