Bitcoin (BTC) continues to trade in a recent consolidation phase, hovering around $90,000 at the time of writing on Friday, as investors digest the Federal Reserve’s cautious December interest rate cut and its impact on risk assets.
BTC price action is approaching a key downtrend line that could determine the next direction move. Meanwhile, institutional flows into spot Bitcoin ETFs saw negligible inflows, with Strategy adding more BTC to its treasury reserves.
Fed’s Policy Stance Triggers Bitcoin Consolidation
Bitcoin price started the week on a positive note, extending its weekend recovery through the first half of the week and holding above $92,600 on Tuesday.
However, momentum waned after the Federal Open Market Committee (FOMC) meeting on Wednesday, with BTC closing at $92,015.
In a widely expected move, the Federal Reserve cut interest rates by 25 basis points. But the FOMC meeting has signaled a possible halt in January.
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Adding to the cautious tone, policymakers expected a cut of only a quarter of a percentage point for the overall 2026 outlook. This is the same outlook as in September, which has tempered market expectations for two interest rate cuts and increased short-term pressure on risky assets.
The Fed’s cautious stance, combined with disappointing Oracle earnings, contributed to a brief risk-off move.
All of these factors weighed on riskier assets, with the largest cryptocurrency by market cap falling to a low of $89,260 before rebounding on Thursday to close above $92,500.
With no major US data releases ahead, cryptocurrency markets will now consider broader risk sentiment on the FOMC members’ speeches and direction.
Later this week.
BTC is likely to consolidate in the near term. Unless a major catalyst appears.
Risk momentum limited due to Russia-Ukraine uncertainty
On the geopolitical front, US President Donald Trump is “very frustrated” with Russia and Ukraine and does not want further talks, his spokesman said on Thursday.
Earlier, Ukrainian President Volodymyr Zelensky said the United States was pressuring Ukraine to cede land to Russia as part of an agreement to end nearly four years of war.
These ongoing geopolitical tensions and stalled peace talks continue to weigh on global risk sentiment, limiting risk appetite and contributing to Bitcoin’s consolidation so far this week.
There are some signs of improvement in institutional needs.
Institutional demand for Bitcoin shows some signs of improvement.
U.S.-listed spot Bitcoin ETFs recorded inflows totaling $237.44 million as of Thursday, following small outflows of $87.77 million a week ago, according to SoSoValue data, indicating some improvement in interest from institutional investors.
However, these weekly inflows are still small compared to those observed in mid-September. For BTC to continue its recovery, ETF inflows will need to strengthen.
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On the corporate side, Strategy Inc. (MSTR) announced Monday that it purchased 10,624 bitcoins for $962.7 million between Dec. 1 and 7 at an average price of $90,615.
The company currently holds 660,624 BTC worth $49.35 billion. The strategy still has significant capacity to raise additional capital and potentially enable large-scale Bitcoin accumulation.
On-chain data shows selling pressure easing
CryptoQuant’s weekly report on Wednesday highlights that selling pressure on Bitcoin is starting to ease.
The report notes that deposits on exchanges have declined as large players have reduced transfers to exchanges.
Looking at the graph below, you can see that the proportion of large companies’ total deposits has fallen from 47%, the highest 24-hour average in mid-November, to 21% as of Wednesday.
At the same time, average deposits decreased by 36% from 1.1 BTC on November 22 to 0.7 BTC.
CryptoQuant concluded that a relief rally could push Bitcoin back to $99,000 if selling pressure remains low. This level is the lower band of the Trader on-chain realized price band, which is price resistance during bear markets.
The main price resistances after this level are $102,000 (1-year moving average) and $112,000 (Trader on-chain realized price).
The Copper Research report also expressed optimism about Bitcoin. The report suggests that BTC’s four-year cycle is not dead. It has been replaced.
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Since the launch of the spot ETF, Bitcoin has exhibited a repeatable cost-based return cycle, as shown in the graph below.
Fadi Aboualfa, head of research at Copper, told FXStreet: “Since the launch of the spot ETF, Bitcoin has moved in repeatable mini-cycles where it reverts to its cost basis and then bounces back around 70%.
Currently, BTC is trading near $84,000 at cost, and this pattern suggests a move above $140,000 in the next 180 days.
Similar to previous cycles, a 10-15% increase in cost basis would produce a target range of $138,000 to $148,000 for the resulting premium seen at historical highs.
Are you heading towards the Bitcoin Santa Rally?
Bitcoin posted a 17.67% loss in November, disappointing traders who had expected a rally based on the month’s strong historical returns (see CoinGlass data below).
December has historically been a positive month for the cryptocurrency king, with an average return of 4.55%.
Looking at quarterly data, the fourth quarter (Q4) was the best quarter for all of BTC, with an average return of 77.38%.
Nonetheless, performance in the final three months of 2025 remains disappointing, with a loss of 19% year to date.
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Is BTC Setting a Bottom?
Bitcoin’s weekly chart shows price support around the 100-week exponential moving average (EMA) of $85,809, which has posted two consecutive green candles following a four-week correction that began in late October.
As of this week, BTC is trading slightly higher, hovering above $92,400.
If BTC continues its recovery, it could extend the rally towards the 50-week EMA at $99,182.
The Relative Strength Index (RSI) on the weekly chart is pointing upward at 40, indicating that the bearish momentum is fading away. For the recovery to continue, RSI must exceed the neutral level of 50.
On the daily chart, Bitcoin price was rejected Wednesday at the 61.8% Fibonacci retracement level of $94,253 (a pullback from the April low of $74,508 to the all-time high of $126,199 set in October).
However, on Thursday BTC rebounded after retesting the psychological $90,000 level.
When BTC breaks the descending trendline (drawn by connecting several high points since early October) and closes above $94,253.
A rising resistance level could extend the rally towards the psychological $100,000 level.
The Relative Strength Index (RSI) on the daily chart is stable near the neutral 50 level, indicating a lack of near-term momentum on both sides.
For bullish momentum to continue, RSI must move above the neutral level.
Meanwhile, Moving Average Convergence Divergence (MACD) showed a bullish crossover in late November and remains intact, supporting the bullish argument.
If BTC resumes its downward correction, The first major support is $85,569.This is consistent with the 78.6% Fibonacci retracement level.