Bitcoin continues to trade within a narrow range around $90,000 as traders evaluate the Federal Reserve”s cautious announcement regarding interest rates. This uncertainty keeps the largest cryptocurrency in a consolidation phase, despite some positive developments like mild inflows into Spot Bitcoin ETFs and ongoing corporate accumulation.
The week”s price action began positively, with Bitcoin reaching above $92,600 on Tuesday. However, by Wednesday, momentum waned, leading to a close at $92,015 post the Federal Open Market Committee (FOMC) meeting. In a widely anticipated decision, the Fed cut interest rates by 25 basis points, but the committee”s comments hinted at a potential pause in further cuts for January. This cautious approach, coupled with underwhelming earnings from Oracle, contributed to a brief risk-off sentiment that dragged Bitcoin down to a low of $89,260 before a recovery to above $92,500 on Thursday.
In the absence of significant US economic data releases, the crypto market now turns to speeches from FOMC members and the overall risk sentiment to gauge the next steps. Analysts expect Bitcoin to remain in its current consolidation, unless a major catalyst emerges.
On the geopolitical front, tensions between the US, Russia, and Ukraine continue to create uncertainty. Reports indicate that US President Donald Trump is frustrated with ongoing discussions about the conflict, impacting global risk appetite and contributing to the consolidation in Bitcoin prices.
Institutional interest in Bitcoin shows mild signs of improvement, with US-listed Spot Bitcoin ETFs recording a net inflow of $237.44 million through Thursday, recovering from a previous outflow. However, this figure is still modest compared to inflows seen in mid-September.
Corporate accumulation is also notable. Strategy Inc. disclosed the purchase of 10,624 Bitcoin for $962.7 million from December 1 to 7, raising its total holdings to 660,624 BTC, valued at $49.35 billion. The company retains the capacity for further acquisitions, signaling optimism in the market.
On-chain analysis indicates an easing of selling pressure on Bitcoin. According to CryptoQuant, large players are reducing their transfers to exchanges, which may support a potential relief rally. If selling pressure remains subdued, analysts suggest that Bitcoin could aim for higher resistance levels, potentially approaching $99,000.
Despite a disappointing performance in November, where Bitcoin posted a 17.67% loss, December has historically been a month of recovery for the cryptocurrency. The average return for Bitcoin in December is noted at 4.55%, while the fourth quarter generally sees positive performance.
Technical indicators also reflect a mix of sentiment. The Relative Strength Index (RSI) on the weekly chart is at 40, indicating diminishing bearish momentum, with a potential breakout scenario if it crosses above 50. On the daily chart, Bitcoin faced resistance at the 61.8% Fibonacci retracement level but rebounded after testing the psychological $90,000 mark.
Overall, as the market continues to assess the impact of the Fed”s decisions and geopolitical tensions, Bitcoin remains poised for potential movement, yet a clear directional breakout appears contingent on forthcoming catalysts.
