Bitcoin (BTC-USD) jumped to hover above $94,000 on Tuesday, but strategists grew cautious of a year-end crypto rally amid growing expectations that the Federal Reserve will cut rates this week, while signaling a potential pause in future policy easing.

Markets widely expect the central bank to deliver a 25-basis-point rate reduction at the end of its two-day policy meeting on Wednesday. But both CME FedWatch and Polymarket show growing bets that Fed Chair Jerome Powell’s post-meeting remarks could signal a pause in January as policy makers try to balance containing inflation with a cooling labor market.

“If Powell does indeed deliver a hawkish speech, the likelihood of a Santa rally for Bitcoin diminishes,” said Nic Puckrin, investment analyst and co-founder of the Coin Bureau in a note on Tuesday.

“Momentum hasn’t been on Bitcoin’s side lately, despite fresh purchases by Michael Saylor’s Strategy (MSTR), so we may well finish 2025 under $100,000,” he added.

However Puckrin expects crypto to rebound once President Trump announces his pick to replace Powell when his term ends in May. The leading candidate is Kevin Hassett, who is viewed as industry-friendly.

“With ultra-dovish Kevin Hassett looking like the frontrunner to replace Powell next year, markets could very quickly switch from depression to euphoria in 2026.,” said Puckrin.

Bitcoin has struggled to rebound in recent weeks after crashing from its October high of around $126,000.

“As BTC trades near the high-end of its recent $81-94k range, we remain cautious towards chasing breakouts here,” Compass Point analyst Ed Engel said in a note on Tuesday morning.

The analysts noted buyers who purchased within the last six months did so at a cost basis of around $103,000 per token.

“When BTC trades below this cost basis, investors are more likely to ‘sell the rip’ than ‘buy the dip,'” said Engel.

Bitcoin has slipped 2% so far this year, setting it up for its worst yearly showing since the 2022 crypto winter wiped out over 64% of its value.

The token is also diverging sharply from stocks for the first time since 2014, as the S&P 500 (^GSPC) powers ahead with a 16% gain.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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