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Bitcoin and the broader crypto market enter the New Year under renewed pressure after the Federal Open Market Committee released its December meeting minutes.
The FOMC minutes make it very clear that thereās little urgency to cut interest rates again in early 2026.
The minutes, published December 30, suggest policymakers favor a pause following Decemberās 25-basis-point cut, pushing expectations for the next reduction toward March at the earliest.Ā
Markets had already priced out a January move, but the language reinforced that view. The FOMC minutes even shadowed rate cut hopes for March 2026.Ā
So, the clear earliest interest rate cut could come in April.Ā
Market Largely Expects No Interest Rate Cut in March 2026. Source: CME FedWatch
Bitcoin has traded in a tight range between roughly $85,000 and $90,000 in recent weeks.Ā
Price action remains fragile after failing to reclaim higher resistance levels, while sentiment indicators point to caution rather than conviction.Ā
Overall, daily crypto trading volumes remain thin. Risk appetite has yet to recover meaningfully after Decemberās pullback.
According to the minutes, several officials argued it would be āappropriate to keep the target range unchanged for some timeā to assess the lagged effects of recent easing.Ā
Others described the December cut as āfinely balanced,ā underscoring limited appetite for follow-up action without clearer inflation progress.
Inflation remains the central constraint. Policymakers acknowledged price pressures āhad not moved closer to the 2 percent objective over the past year,ā even as labor market conditions softened.Ā
FOMC cited Tariffs as a key driver behind stubborn goods inflation, while services inflation showed gradual improvement.
At the same time, the Fed flagged rising downside risks to employment. Officials noted slowing hiring, muted business plans, and growing concern among lower-income households.Ā
Still, most participants preferred to wait for additional data before adjusting policy again.
For crypto markets, the message is straightforward. With real yields elevated and liquidity conditions tight, near-term upside catalysts remain scarce.Ā
Bitcoinās recent consolidation reflects that tension, as investors balance expectations for eventual easing against the reality of higher-for-longer rates.
Crypto Market Activity at Large Shows Bearish Momentum. Source: CoinMarketCap
Looking ahead, March now emerges as the first realistic window for another cut, assuming inflation cools and labor conditions weaken further.Ā
Until then, crypto markets may struggle to regain momentum. Prices are likely to remain vulnerable to further downside if macroeconomic data disappoints early in 2026.
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