Bitcoin’s recent performance in response to announcements from the US Federal Reserve has emerged as a significant trend in the cryptocurrency market this year. Following each Federal Open Market Committee (FOMC) update, Bitcoin, the world’s leading cryptocurrency, has shown a marked decline, highlighting its increasing correlation with changes in interest rate expectations and broader economic sentiments.
Analyst CryptoMichNL recently posted insights on social media, suggesting that the Federal Reserve is transitioning from the aggressive liquidity settings of 2021 towards a more supportive stance expected by 2025. However, he cautioned that this shift may not have an immediate impact on financial markets; such adjustments often require time to manifest. Consequently, Bitcoin has faced downward pressure after each FOMC meeting in 2025, with movements largely designed to eliminate long positions through high liquidations.
Despite these fluctuations, CryptoMichNL believes that significant market developments may emerge within the next one to two weeks, which could clarify Bitcoin’s trajectory as it heads into 2026. Although the bullish momentum remains intact, he noted that Bitcoin must avoid breaking below recent lows during the FOMC-induced pullbacks. Instead, a critical resistance level around $92,000 needs to be surpassed to test the psychological $100,000 benchmark.
The current trading environment for Bitcoin appears volatile, characterized by irregular price movements and illiquid order books. However, CryptoMichNL remains optimistic about a potential upward breakout in the near future. Remarkably, despite the market’s choppiness, Bitcoin has been forming higher lows, suggesting a developing upward structure.
Daan Crypto Trades, another experienced trader and investor in the crypto space, concurs with CryptoMichNL’s outlook. He pointed out that Bitcoin’s recent price action rebounded effectively from the 0.382 Fibonacci retracement level, which is indicative of the overall cycle. He emphasized that this bounce from the Fibonacci level represents the lowest price point Bitcoin could reach without disturbing its broader weekly market structure.
Daan noted that any dips beyond the November lows would place bulls in a precarious position. As 2023 draws to a close, he anticipates that the selling pressure characteristic of the cryptocurrency’s four-year cycle will begin to wane. Looking ahead, the first quarter of 2026 is poised to be crucial, as it is expected to provide clearer indications of Bitcoin’s future direction and market cycle trajectory.
