TLDRFederal Reserve delivered 25 basis point rate cut Wednesday, sending Bitcoin from $94,400 down to $92,000Powell warned inflation battle continues while expressing concern about weakening labor market conditionsFed will buy $40 billion in Treasury securities starting Friday in shift from three years of balance sheet reductionStock futures dropped after hours with Nasdaq down 1.3% as Oracle earnings disappointed investorsTwo Federal Reserve members voted against the rate cut showing internal disagreement on policy directionBitcoin experienced sharp volatility Wednesday following the Federal Reserve’s 25 basis point interest rate cut. The cryptocurrency surged to $94,400 during Fed Chair Jerome Powell’s press conference before tumbling back to $92,000.Bitcoin (BTC) PriceThe Fed lowered its target rate range to 3.5% to 3.75%, marking the third cut this year. However, the decision faced opposition from two FOMC members who voted to keep rates unchanged.Powell delivered contradictory messages about the economy during his remarks. He acknowledged the labor market might be weaker than expected while simultaneously warning that inflation remains a concern. The mixed signals confused traders across crypto and stock markets.Bitcoin ended Wednesday trading at $92,000, down 0.8% over 24 hours. Ethereum performed better, holding above $3,300 with a 1.1% gain during the same period.Stock Markets React to Fed DecisionMajor stock indexes closed higher Wednesday following the rate announcement. The S&P 500 climbed 0.7% while the Nasdaq added 0.5%. The US dollar weakened 0.6% against major currencies including the euro and Japanese yen.E-Mini S&P 500 Dec 25 (ES=F)The positive momentum didn’t last into after-hours trading. Nasdaq 100 futures plunged 1.3% while S&P 500 futures dropped 0.9%. Dow Jones futures fell 0.4% as investors digested the Fed’s cautious outlook.Oracle stock crashed more than 10% after the bell when the company reported quarterly revenue below analyst expectations. The disappointing cloud infrastructure numbers dampened enthusiasm from the earlier rally.Powell stated the Fed is “well positioned to wait and see” about additional rate cuts. He emphasized that a large amount of economic data will arrive before the January meeting, which will guide future policy decisions.Fed Announces Treasury Purchase ProgramThe New York Fed announced plans to purchase approximately $40 billion in Treasury securities over the next month. The buying program starts Friday and will target short-term Treasury bills and securities with up to three years of maturity.This marks a reversal from the past three years when the Fed steadily reduced its balance sheet. Powell said the elevated purchases will continue for several months. The program aims to ease financial conditions without triggering full quantitative easing.Analysts from Capital.com said the Fed made clear this cut doesn’t begin an aggressive easing cycle. Future rate decisions will depend on incoming inflation and employment data.Brian Coulton from Fitch Ratings expects only two more rate cuts by June 2026. This would bring the Fed funds rate to 3.25% at the upper band. The relatively mild increase in core inflation in recent months likely convinced the committee another cut was justified.David Hernandez from 21Shares noted Bitcoin needs fresh momentum to break through resistance at $94,500. He said strengthening spot ETF inflows could push Bitcoin back above $100,000 as the cost of capital decreases.Powell ruled out rate hikes while praising the US economy’s overall strength. He mentioned tariffs under President Trump have contributed to inflation pressures. The Fed chair said officials will carefully monitor economic conditions before making further policy adjustments.The post Why Is Crypto Down Today? Let’s Dive In appeared first on Blockonomi.