Crypto Tanks After Fed Cut: Santiment Breaks Down | Crypto News
Crypto markets lurched decrease after the Federal Reserve delivered precisely what everybody said they wished: the third straight 25bps cut to close out 2025. Santiment’s latest deep dive makes a simple, barely uncomfortable level: retail handled it as a inexperienced mild, whales handled it as exit liquidity.
Bitcoin shortly rallied to $94,044, Ether surged to $3,433, XRP hit $2.10 and Solana managed to attain $142, but the momentum was short-lived. The BTC price fell by more than 5% at one level, ETH even fell by more than 8.5%.
What Caused The Crypto Market Plunge?
On 11 December, the FOMC confirmed another quarter-point discount, finishing what Santiment calls the “trifecta of cuts at the end of 2025.” Lower charges imply cheaper borrowing, more risk-taking, and—on paper—a friendlier backdrop for crypto. The Fed still describes an economic system growing at a “moderate” tempo with inflation above goal, and in both the October and December conferences it cut because “the balance of risks (like slowing job growth) supported easing policy.”
The key shift is liquidity. On 29 October, the Fed determined to slow the discount of its securities holdings from 1 December, easing the tempo of balance-sheet runoff. By 10 December, it went additional, saying bank reserves had fallen “too much” and saying renewed purchases of short-term Treasury payments to keep reserves “ample.” That is a transfer from shrinking the stability sheet to quietly including money back into the system. As Santiment notes, the Fed is still data-dependent but clearly more keen to lean dovish to defend financial situations.
Markets, however, front-ran the story. Prediction platform Polymarket confirmed an “overwhelming amount of optimism” in the hours before Jerome Powell spoke. At the same time, on-chain data flagged irregular exercise: @DeFiTracer noticed a whale promoting roughly 100 million {dollars}’ price of Bitcoin within an hour, triggering “a healthy mix of sensationalized panic.” The anticipated final result—another cut—arrived, but positioning around it was something but balanced.
Bitcoin’s price response regarded bullish at first. BTC spiked to about $94,044 after the announcement. Yet Santiment’s social data exhibits that the positive-versus-negative commentary ratio for Bitcoin had already peaked nicely before Powell’s remarks. The crowd’s emotional high got here in anticipation; when the precise rally hit, merchants have been “quite modestly reactive” despite the transfer to 94K. Sentiment was spent.
Ethereum was worse. Over the same 24-hour window, ETH surged to around $3,433, and the constructive remark ratio “was a LOT more interesting.” Santiment describes “a lot of FOMO after a mini surge immediately after Powell spoke,” with many merchants who purchased the breakout “eventually [getting] burned when ETH fell back down to 3,170.” It is the textbook “buy the rumor, sell the news” sample: bullish macro headline, short-term bearish price motion, retail shopping for the spike while bigger holders “gladly” offload into the mini-rally.
Structurally, though, the report just isn’t outright bearish. Year-to-date, Santiment notes, Bitcoin is down about 3.6%, versus a 17.6% gain for the S&P 500 and a hanging 61.1% for gold. “It’s quite the dramatic difference,” the crew writes, arguing that “a regression to the mean for BTC would be justified.”
With three cuts now locked in and reserves being topped up via T-bill purchases, the “catch-up” case for crypto versus equities and metals “becomes even stronger.” Historically, crypto “has reacted later than equities or commodities when macro trends shift.”
On-chain, so-called good money seems to be appearing as if that delayed response is coming. Wallets holding 10–10,000 BTC have added 42,565 Bitcoin since 30 November. What is “still [remaining],” Santiment says, is “a notable dump from retail, which would be indicative of the perfect recipe for a major bull run.” For now, they count on smaller merchants to “run on fumes from this positive news of rates getting cut, for at least a couple of days.”
The backside line of the report is intentionally sober. The ultimate FOMC resolution of 2025 “reinforces a narrative of gradual easing, improving liquidity, and a cautiously supportive environment for risk assets.”
After a tough yr, “ending the year with three consecutive rate cuts from the Fed is a strong sign.” If inflation drifts toward goal and financial data stays steady, Santiment argues, 2026 may finally give digital property “the breathing room they’ve been waiting for.” Just don’t confuse that with an invitation to chase the first post-Fed spike—because, as this week just reminded everybody, that is still where crypto vacationers go to get burned.
At press time, the overall crypto market cap was at $3.04 trillion.
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