Bitcoin briefly surged above $94,000 before sharply reversing on Wednesday as Federal Reserve Chair Jerome Powell delivered a message that straddled both dovish and hawkish themes following a widely expected 25 basis-point rate cut.

After trading near $92,000 for much of the session, bitcoin jumped to a high of $94,400 during Powell’s post-meeting press conference, when he flagged the risk that the U.S. labor market may be weaker than previously assumed. The rally faded quickly, however, after Powell stressed that the fight against elevated inflation is far from finished.

Bitcoin was last changing hands around $92,000, down 0.8% over the past 24 hours. Ether continued to outperform, hovering above $3,300 and gaining roughly 1.1% over the same period.

U.S. equities were modestly higher late in the session, with the Nasdaq up 0.5% and the S&P 500 advancing 0.7%. The standout move came in currency markets, where the dollar slid about 0.6% against the yen, euro and British pound.

Powell said monetary policy is now “within a range of plausible estimates of neutral,” giving the Fed flexibility to assess the “extent and timing of additional adjustments.” He added that policymakers are “well positioned to wait and see” before making further rate cuts, noting that a substantial amount of economic data will be released ahead of the Fed’s January meeting.

Alongside the rate cut, the New York Fed announced it will begin purchasing short-term Treasury bills and Treasury securities with maturities of up to three years if needed, targeting roughly $40 billion in purchases over the next month starting Friday. The move is designed to ease financial conditions without signaling a return to full-scale quantitative easing. Powell said these purchases will remain “elevated” for several months.

The step marks a shift after three years of balance-sheet reduction following the pandemic-era expansion.

Analyst takes

“The Fed made clear that this cut does not mark the start of an aggressive easing cycle,” said Daniela Hathorn, senior market analyst at Capital.com, pointing to policymakers’ emphasis that future decisions will hinge on incoming inflation and labor-market data. While officials agreed on modest easing amid patchy post-shutdown data and signs of slowing momentum, she said the updated guidance underscored caution.

Brian Coulton, chief economist at Fitch Ratings, noted that the decision was closely contested, with two FOMC members voting to hold rates steady. The recent mild pickup in core inflation likely convinced the committee that another cut — while keeping rates slightly above neutral — was warranted. “It seems unlikely that rates continue to fall at sequential meetings from here,” Coulton said, adding that Fitch expects two additional cuts by June 2026, bringing the upper bound of the fed funds rate to 3.25%.

David Hernandez, crypto investment specialist at 21Shares, said Powell is “threading the needle” between the Fed’s dual mandate by signaling a potential pause in rate cuts while restarting Treasury purchases. For bitcoin to break decisively higher, Hernandez said it needs fresh catalysts to overcome concentrated short positioning near the $94,500 resistance level.

“If spot ETF inflows strengthen as expected as the cost of capital declines, that could be the spark that turns caution into momentum and drives bitcoin back above the $100,000 psychological mark,” he said.