Bitcoin (BTC) is currently trading within a recent bottoming phase. As of the time of writing on Friday, it is moving around the $90,000 mark. Investors are digesting the cautious rate cut from the Federal Reserve (Fed) in December and its impact on risk assets.
The price movement of BTC is approaching a key downward trend line that could determine the next direction. Meanwhile, the inflow of institutional spot Bitcoin ETFs has slightly increased. Strategy has added more Bitcoin to its treasury reserves.
Fed policy stance triggers Bitcoin correction
Bitcoin price started the week positively. After maintaining a rebound over the weekend, it held above $92,600 by Tuesday.
However, the upward trend weakened on Wednesday, closing at $92,015 after the FOMC meeting.
As expected, the Fed cut the benchmark interest rate by 0.25%. However, the FOMC meeting hinted that there might be no further action in January.
Policymakers announced that they expect only a single 0.25% point cut for the overall outlook for 2026. This is consistent with the September forecast. As a result, market expectations for two cuts diminished, acting as a short-term burden on risk assets.
The Fed's cautious stance and Oracle's disappointing performance have temporarily strengthened risk-averse tendencies.
Due to these factors, the largest cryptocurrency by market capitalization dropped to $89,260 before rebounding to close above $92,500 on Thursday.
In the absence of major U.S. economic indicators, the cryptocurrency market will look for direction based on speeches from FOMC officials and overall investor sentiment.
This atmosphere continues as the week progresses.
BTC is likely to consolidate unless there is a clear catalyst in the short term.
Russia-Ukraine uncertainty... limiting risk appetite
From a geopolitical perspective, U.S. President Donald Trump expressed being 'extremely dissatisfied' with Russia and Ukraine. A spokesperson stated on Thursday that he hopes no further discussions will take place.
Earlier, Ukrainian President Volodymyr Zelensky stated that the U.S. is pressuring Russia to cede part of its territory. He indicated that this is part of an agreement to end the nearly four-year-long war.
Continued geopolitical tensions and a stalemate in peace negotiations are dampening global investor sentiment. This has limited investors' risk appetite, leading to a consolidation of Bitcoin throughout this week.
Institutional demand shows signs of improvement
Institutional investors' demand for Bitcoin shows slight signs of improvement.
According to SoSoValue data, U.S.-listed spot Bitcoin ETFs recorded a net inflow of $237.44 million by Thursday. This indicates a partial recovery in institutional investor interest compared to a slight outflow of $87.77 million a week ago.
However, this week's inflow remains low compared to mid-September. For Bitcoin to maintain its upward trend, ETF inflows need to strengthen further.
From a corporate perspective, Strategy Inc. (MSTR) announced that it purchased 10,624 BTC at an average price of $90,615, totaling $960.27 million from December 1 to 7.
The company currently holds 660,624 BTC, worth approximately $49.35 billion. The strategy leaves substantial capital raising capacity intact, making large-scale Bitcoin accumulation in the future quite possible.
On-chain data, selling pressure alleviated
In the weekly report released by CryptoQuant on Wednesday, it emphasizes that Bitcoin selling pressure has begun to alleviate.
According to the report, large investors have reduced their deposits (transfers) to exchanges, leading to a decrease in exchange deposit volumes.
According to the graph below, the deposit ratio of large investors dropped from a 24-hour average high of 47% in mid-November to 21% as of Wednesday.
At the same time, the average deposit amount per transaction also decreased by 36%, from 1.1 BTC on November 22 to 0.7 BTC.
CryptoQuant concluded that if selling pressure remains low, Bitcoin may rebound to the $99,000 range. This area is the lower band of the trader on-chain realized price, an important price resistance level in a bear market.
If this level is broken, the next major price resistance levels are $102,000 (1-year moving average) and $112,000 (trader on-chain realized price).
The Copper Research report presents an optimistic outlook for Bitcoin, emphasizing that the four-year cycle of BTC has not disappeared but has been replaced.
Since the launch of the spot ETF, Bitcoin has shown a recurring cost-based profit cycle as illustrated in the graph below.
Fadi Abu Alpha, head of Copper Research, told FXStreet, "After the launch of the spot ETF, Bitcoin has repeatedly shown a mini-cycle that involves falling to cost basis and then a rebound of about 70%."
Currently, BTC is trading close to $84,000, suggesting that this pattern may exceed $140,000 within the next 180 days.
If the cost basis rises as it did in the past by 10-15%, considering the premiums seen at previous peaks, the target price range is between $138,000 and $148,000.
Is the Bitcoin Santa rally coming?
Bitcoin recorded a 17.67% drop in November, disappointing traders who were expecting a rally due to strong past returns this month (see Coinglass data below).
December has traditionally been a positive month for 'King Crypto,' with an average return of 4.55%.
Quarterly data shows that Q4 is the best quarter for BTC, with an average return of 77.38%.
However, the performance in the last three months of 2025 is still poor, with a current loss of 19%.
BTC, consolidating?
The weekly Bitcoin chart indicates that prices are supported near the 100-week exponential moving average (EMA) of $85,809, with two consecutive bullish candles appearing after a four-week correction that began at the end of October.
As of this week, BTC is trading slightly higher, exceeding $92,400.
If BTC continues to rebound, the rally could extend to $99,182, the 50-week EMA.
On the weekly chart, the RSI is at 40, indicating an upward trend and showing that bearish momentum is weakening. For the rally to sustain, the RSI must exceed the neutral line of 50.
On the daily chart, Bitcoin price faced resistance at $94,253, the 61.8% Fibonacci retracement level (from the April low of $74,508 to the October high of $126,199).
However, on Thursday, after testing the psychological support level of $90,000, BTC rebounded.
If BTC breaks above the downward trend line (drawn by connecting several peaks since early October) and closes above $94,253,
The rally may continue beyond the resistance level, reaching the psychological level of $100,000.
The RSI on the daily chart remains stable near the neutral line of 50, suggesting a lack of clear momentum in either direction in the short term.
For a strong upward trend to continue, the RSI must break through the neutral line.
Meanwhile, a strong bullish crossover appeared in the Moving Average Convergence Divergence (MACD) at the end of November, and this signal is being maintained, supporting a positive outlook.
If BTC resumes its downward correction, the first key support level is $85,569, which coincides with the 78.6% Fibonacci retracement area.
