- Crypto traders brace for volatility as the Fed’s next move could shape global liquidity and risk sentiment into year-end.
- Analysts warn tight liquidity may persist despite rate cuts, keeping pressure on Bitcoin and traditional markets alike.
- Powell’s post-meeting tone may steer market mood as investors juggle Fed policy shifts, inflation, and global tensions.
Tension is building across global markets as investors await today’s Federal Open Market Committee (FOMC) decision. The meeting could define the direction of both traditional and crypto markets heading into year-end. While the market overwhelmingly expects a 25-basis-point cut, traders are watching for what Federal Reserve Chair Jerome Powell says next.
According to analyst Doctor Profit, “The end of QT doesn’t mean the start of QE. It means tight money stays, but without fresh liquidity injections.” His warning underscores rising fears that liquidity may keep drying up even after rate cuts.
Doctor Profit emphasized that markets underestimate the severity of current liquidity stress. “The money tap remains closed, banks are starved for cash, and central banks are quietly propping up a fragile system,” he noted.
He added that the ongoing repo market strain could spark a crisis worse than in 2019. Consequently, he remains short on both Bitcoin and U.S. stocks, expecting no sustainable strength ahead. His short orders are positioned between $116,700 and $117,200 for BTC, with most of his portfolio in USDT.
FOMC Rate Cuts Stir Market Speculation
Before lowering rates in late 2024, the Fed maintained them at 5.5% for over a year. After the most recent 0.25% decrease in September 2025, rates are currently at 4.25%. There is little space for surprises as markets predict a 98% possibility of another 0.25% drop today, according to CME data. While a lesser or unaltered decision can cause instability, a larger cut might lead to a powerful rise.
Long-term cryptocurrency growth has historically been aided by improved liquidity brought about by rate reductions. But the bullish effect frequently delays. The cryptocurrency bull market didn’t really take off until late 2020, even though rates started to decline in 2019. Furthermore, there is little opportunity for dramatic easing because inflation is still well above the Fed’s 2% target.
This week’s broader events could amplify volatility. President Trump’s meeting with China’s Xi Jinping and upcoming tech earnings from Apple, Microsoft, and Google add more uncertainty. Hence, Powell’s comments after the meeting could either calm or shake global risk appetite.
