Fed Decision Looms: Bitcoin Shows Caution as MicroStrategy Doubles Down on $90K Buys

The crypto market is holding its breath. Bitcoin stands at $87.72K (down 0.35% in 24h), consolidating near critical support levels as traders exercise notable caution ahead of the Federal Reserve’s December 9-10 policy announcement. The prevailing narrative is clear: a quarter-point rate cut appears almost inevitable, with Fed funds futures pricing in approximately 87% odds of the move.

Why the Hesitation in Crypto Markets?

When the Fed cuts rates, bonds and cash become less attractive. This dynamic typically benefits non-yielding assets like Bitcoin. Yet here’s the paradox—the market isn’t rushing in. Why? Because uncertainty hangs heavy. Recent U.S. economic data shows a softening labor market and inflation that’s cooling but still sticky. Not all Fed officials align on whether more cuts are coming, leaving room for a surprise hold.

The cautious approach from investors reflects a broader pattern: before major macro events, traders prefer sitting on their hands rather than taking directional bets. Bitcoin’s late-2024 rally was fueled by easing cycle expectations, but that momentum has plateaued as markets await confirmation.

MicroStrategy’s Aggressive Stance Amid Market Caution

While others hesitate, MicroStrategy (NASDAQ:MSTR) is moving aggressively. The publicly traded Bitcoin treasury company announced it acquired 10,624 BTC between December 1-7, bringing total holdings to 660,624 BTC at an average purchase price of $90,615 per coin. This is a statement: despite index inclusion concerns, MSTR sees current valuations as compelling entry points.

The company faces potential exclusion from MSCI benchmarks, which could trigger capital outflows. Yet management’s continued accumulation signals confidence in Bitcoin’s longer-term trajectory.

Altcoin Reality Check

The risk-off mood extends beyond Bitcoin. Ethereum dropped 0.45% to $2.95K, while XRP slipped 0.48% to $1.86. Solana and Cardano each fell roughly 1-2%, with Dogecoin down 0.60%. The pattern is unmistakable: when macro uncertainty rises, altcoin weakness intensifies faster than Bitcoin weakness.

What Happens Next?

The Fed’s decision will be a pivot point. A rate cut strengthens the case for renewed crypto upside, especially if commentary signals more cuts ahead. A hold would likely trigger sharp selloffs. For now, the market’s caution is justified—and MicroStrategy’s conviction buying could prove prescient or premature depending on what Jerome Powell says next.