Last night, the Federal Reserve announced a 25 basis point rate cut. Logically, this should be positive for risk assets, but Bitcoin surprisingly didn't respond favorably. It plummeted directly from $94,500 to around $92,000, leaving many people confused by this counterintuitive move.

Actually, I’ve seen this phenomenon more than once. The market’s script often plays out completely opposite to our expectations, and there is a deeper logic behind it. Let’s analyze why a rate cut can turn into a bearish signal.

**Expectations Were Already Priced In**

This rate cut was not a sudden surprise. As early as a month ago, CME’s Federal Reserve Watch tool showed an over 80% probability of a rate cut. Bitcoin had already hit a record high of $126,250 in early October, and that rally had essentially priced in the benefits of a rate cut long before.

There’s an old saying in financial markets: "Buy on expectations, sell on realization." When the news actually materializes, it often becomes the main players’ window to cash out. After the rate cut was announced last night, the price initially surged, then sharply dropped—this is a classic example of "good news being fully digested."

**Internal Conflicts Within the Fed**

While there was some easing, opposition voices were increasing. At the December meeting, the number of officials opposing further rate cuts rose to two, indicating that the difficulty of further easing is increasing.

The market’s biggest fear isn’t bad news but uncertainty. If expectations of future rate cuts start to waver, investors will begin to risk-avoid. This reversal of expectations often has a greater impact than the actual news itself.