#CryptoMarketRebound

FED Cut Rates So Why Didn’t Bitcoin Rise?

Analyst Markus Thielen Explains the Decline and Shares His Preferred Altcoin Over Ethereum

Despite widespread expectations, Bitcoin failed to rally after the Federal Reserve’s interest rate cut, catching investors off guard and raising concerns about the sustainability of the current crypto market rally.

Federal Reserve Policy: The Real Trigger

According to market analyst Markus Thielen, the issue was not the rate cut itself, but the messaging from FED Chair Jerome Powell.

Powell’s remarks carried both hawkish and dovish elements, creating uncertainty across risk markets. Initially, comments suggesting that labor market data may be overstated led traders to anticipate further rate cuts. This optimism briefly pushed Bitcoin toward the $94,000 level.

However, the rally faded quickly after the FED’s official statement signaled a more restrictive outlook. The committee now expects only one rate cut next year and another the following year, indicating that monetary easing will be slower and less aggressive than markets had priced in.

Technical and On-Chain Signals Point to Weakening Momentum

Thielen highlighted several warning signs confirming a loss of momentum:

Bitcoin has broken below the bull market channel that had been intact since 2023 and is now attempting to hold near its lower boundary.

Inflows into Bitcoin ETFs, a key indicator of institutional participation, have slowed significantly compared to last year.

On-chain data shows a net Bitcoin outflow in December, the first such occurrence since August 2023, signaling reduced capital commitment.

Without renewed capital inflows, Thielen believes Bitcoin will struggle to recover meaningfully from current levels.
Market Outlook: Sideways Consolidation Expected

With institutional investors closing positions ahead of the year-end holiday period, Thielen does not expect major price movements in the near term. Instead, he anticipates a phase of sideways consolidation until liquidity conditions improve.

He also challenges the traditional halving-driven cycle narrative, suggesting that U.S. midterm election cycles may have a stronger long-term influence. Ultimately, he stresses that actual cash flows, not narratives, determine market direction.

Altcoins Face Structural Pressure

On the altcoin front, Thielen warns of sustained selling pressure due to venture capital token unlocks, estimated at approximately $59 billion annually.

With institutional capital largely concentrated in Bitcoin and Ethereum, and limited new catalysts for altcoins, recovery across the broader altcoin market may remain constrained.

Why BNB Over Ethereum?

In a notable shift from conventional preferences, Thielen stated that he favors BNB over Ethereum due to:

Strong ecosystem-driven utility

Consistent demand generated by exchange usage

More attractive risk-to-reward dynamics under current market conditions

Final Perspective

This market is not driven by speculation alone. Liquidity, policy clarity, and real capital inflows are now the dominant forces shaping price action. Selectivity and patience remain critical as momentum rebuilds.