Bitcoin (BTCUSD) continues to navigate a consolidation phase, maintaining a steady presence around $90,000 as investors evaluate the Federal Reserve’s recent decisions on interest rates. The market is particularly focused on the potential implications of the Fed’s cautious tone regarding future rate cuts, affecting risk assets including cryptocurrencies.
The week commenced positively for Bitcoin, with prices recovering above $92,600 early in the week. However, after the Federal Open Market Committee’s (FOMC) meeting, sentiment shifted. The Fed’s decision to lower interest rates by 25 basis points was expected, but the accompanying guidance suggested a pause in any further cuts for January, which tempered expectations. Policymakers predict that only a modest one-quarter-percentage-point cut will occur through the overall outlook for 2026, mirroring views presented in September. As a result, market sentiments turned cautious, particularly influenced by disappointing earnings reports from Oracle, which triggered a brief pullback in risk assets, including Bitcoin. The cryptocurrency sank to a low of $89,260 but managed to rebound to finish above $92,500.
With no major economic data expected from the U.S. shortly, market watchers will be focusing on upcoming speeches from FOMC members for further guidance. In the near term, Bitcoin appears likely to consolidate unless a significant catalyst emerges.
On the geopolitical front, tensions between the U.S., Russia, and Ukraine are influencing market sentiment. U.S. President Donald Trump expressed frustration over the ongoing situation, particularly regarding discussions of land concessions by Ukraine in exchange for peace. These geopolitical uncertainties are dampening risk appetite and further contributing to Bitcoin’s consolidation phase.
On a more positive note, signs of institutional interest in Bitcoin are beginning to show improvement. Data from SoSoValue reveals that U.S.-listed spot Bitcoin ETFs experienced inflows totaling $237.44 million through Thursday, recovering from a recent outflow of $87.77 million. While these inflows are relatively modest compared to September’s levels, they indicate a revival of institutional investor interest. Additionally, Strategy Inc. reported significant purchases of Bitcoin, acquiring 10,624 BTC for $962.7 million at an average price of $90,615, bringing its total holdings to 660,624 BTC, valued at $49.35 billion.
Recent on-chain data from CryptoQuant indicates a decline in selling pressure on Bitcoin, suggesting that larger investors are making fewer transfers to exchanges. The report highlighted that the share of total deposits by large players dropped from 47% in mid-November to 21% recently. This easing of selling pressure may open the door for a relief rally, possibly propelling Bitcoin back toward the $99,000 mark, which represents a critical resistance level during bear markets.
Analysts are also expressing optimism regarding Bitcoin’s potential trajectory. Fadi Aboualfa, Head of Research at Copper, stated that since the launch of spot ETFs, Bitcoin has been demonstrating repeatable cycles that suggest a price rebound could push BTC beyond $140,000 within the next 180 days.
Historically, December has been a positive month for Bitcoin, contrasting with the disappointing performance of November, which saw a 17.67% loss. Historically, Bitcoin has achieved an average return of 4.55% in December, with the fourth quarter typically yielding the best returns, averaging around 77.38%. However, the performance of Bitcoin in recent months has been less than stellar, raising questions about its momentum moving forward.
Analyzing Bitcoin’s technical indicators, the price is currently finding support around the 100-week Exponential Moving Average (EMA) at approximately $85,809, having posted two consecutive green candles after a four-week correction that began in late October. If Bitcoin continues its recovery, projections indicate it could still extend toward the 50-week EMA at around $99,182. The Relative Strength Index (RSI) is currently pointing upward at 40, suggesting that bearish momentum may be waning. For a sustained recovery, the RSI would need to surpass the neutral level of 50.
Daily charts indicate that Bitcoin faced rejection at the 61.8% Fibonacci retracement level of $94,253 earlier in the week. However, it has demonstrated resilience by rebounding after testing the psychological level of $90,000. A breakout above the descending trendline and closing above the resistance of $94,253 could fuel further upward momentum, potentially reaching the psychological barrier of $100,000.
Despite the current consolidation and potential bullish signals, traders remain vigilant, as any downward trajectory would necessitate close monitoring of key support levels, particularly at $85,569, which aligns with significant Fibonacci retracement levels.
