Bitcoin (BTC) is still trading in the recent consolidation phase, hovering around $90,000 at the time of writing on Friday, as investors analyze the Federal Reserve's (Fed) cautious rate cut in December and its impact on risk assets.
BTC: The price is approaching a critical descending trend line that could determine the next direction. At the same time, institutional investments in the Spot Bitcoin ETF were moderate, and Strategy added BTC as part of its cash reserves.
The tone of the Fed's policy is causing consolidation in Bitcoin.
Bitcoin's price started the week positively, continuing the weekend recovery from the beginning of the week and staying above 92,600 dollars on Tuesday.
On Wednesday, the sentiment weakened as BTC closed at 92,015 dollars after the FOMC meeting.
As expected, the Fed cut the benchmark rate by 25 basis points. However, the FOMC meeting indicated a pause in January.
Political decision-makers are still considering a mere 0.25 percentage point rate cut for the entire year 2026 outlook. This was the same estimate as in September, which dampened expectations for two rate cuts and brought short-term pressure on risky assets.
The Fed's cautious tone combined with Oracle's weak results caused a brief shift away from risk assets.
These factors weighed on risk-sensitive assets, and the largest cryptocurrency by market value dropped to 89,260 dollars before recovering and ultimately closing above 92,500 dollars on Thursday.
With the absence of significant U.S. statistical releases, the cryptocurrency markets are now following the speeches of FOMC members and the overall risk sentiment to find direction.
at the end of the week.
BTC is expected to remain in a consolidation phase in the near term unless a significant catalyst shifts the direction.
Uncertainty between Russia and Ukraine limits the sentiment based on risk-taking.
On the geopolitical front, U.S. President Donald Trump is "extremely frustrated" with Russia and Ukraine and does not want any further discussions, his spokesperson said on Thursday.
Previously, Ukrainian President Volodymyr Zelensky stated that the United States is pressuring the country to cede territories to Russia as part of ending a nearly four-year war.
These ongoing geopolitical tensions and stalled peace negotiations are still weighing on the risk sentiment globally, limiting the appetite for risk and contributing to Bitcoin's consolidation this week.
Institutional demand shows slight signs of improvement.
The growth of institutional demand for Bitcoin is showing slight signs.
According to SoSoValue, U.S. spot Bitcoin ETFs attracted a total of 237.44 million dollars in investments by Thursday, following a small net inflow of 87.77 million dollars the previous week, indicating growing interest from institutional investors.
However, these weekly investments are still small compared to mid-September. For BTC's recovery to continue, ETF investments should increase significantly.
The corporate world Strategy Inc. (MSTR) announced on Monday that it bought 10,624 Bitcoins for 962.7 million dollars at an average price of 90,615 dollars from December 1 to 7.
The company currently holds 660,624 BTC, valued at 49.35 billion dollars. Strategy still has significant capacity to raise additional capital, enabling continued large Bitcoin purchases in the future.
On-chain data shows that selling pressure is easing.
CryptoQuant's Wednesday weekly report highlights that Bitcoin's selling pressure is starting to ease.
According to the report, exchange deposits have decreased as large players have reduced their transfers to exchanges.
The chart below shows that the share of large players' deposits of the total amount has dropped from mid-November's peak of 47% to 21% on Wednesday.
At the same time, the average deposit has dropped by 36%, from 1.1 BTC on November 22 to 0.7 BTC.
CryptoQuant estimates that if selling pressure remains low, a relief rally could push Bitcoin back to 99,000 dollars. This level represents the lower bound of the Trader On-chain Realized Price range, which is a typical resistance level in bear markets.
After this, the most significant price resistances are found at 102,000 dollars (one-year moving average) and 112,000 dollars (Trader On-chain Realized Price).
The report from Copper Research also showed optimism regarding Bitcoin. According to the report, BTC's four-year cycle has not disappeared, but has been replaced by a new model.
Following the launch of spot ETFs, Bitcoin has shown repeated cost-based yield cycles, as seen in the chart below.
Fadi Aboualfa, Chief Research Officer at Copper, told FXStreet: "Since the arrival of spot ETFs on the market, Bitcoin has moved in repeated mini-cycles, where the price returns to its cost base and then rises about 70%."
With BTC now hovering near its cost base of 84,000 dollars, this pattern suggests a direction towards over 140,000 dollars in the next 180 days.
If the cost base rises by 10-15% as seen in previous cycles, the premium seen at earlier peaks would result in a target range of 138,000-148,000 dollars.
Is Bitcoin facing a price rally ahead?
Bitcoin recorded a loss of 17.67% in November, disappointing traders who expected a price rally based on the month's strong historical returns (see CoinGlass data below).
December has historically been a positive month for Bitcoin – the average return has been 4.55%.
Quarterly, the fourth quarter (Q4) has been the strongest on average for BTC, with an average return of 77.38%.
However, the development in the last three months of 2025 has been weak – currently down 19%.
Is BTC setting a bottom?
Bitcoin's weekly chart shows that the price found support at the 100-week exponential moving average (EMA) level, at 85,809 dollars. After two consecutive green candles, a four-week correction began at the end of October.
This week, BTC's price is slightly higher, above 92,400 dollars.
If BTC continues to recover, it may continue a price rally towards the 50-week EMA, which is 99,182 dollars.
The weekly chart's Relative Strength Index (RSI) is at 40, trending upwards, indicating a weakening bear sentiment. For the recovery rally to continue, the RSI should rise above the neutral 50 level.
On the daily chart, Bitcoin's price was rejected at the 61.8% Fibonacci levels, from 94,253 dollars (drawn from the April low of 74,508 dollars to the all-time high of 126,199 dollars seen in October) on Wednesday.
On Thursday, however, BTC recovered after testing the psychological level of 90,000 dollars again.
If BTC breaks the descending trend line (formed by connecting several peaks from early October) and closes above 94,253 dollars.
At the resistance level, the price rally may continue towards the psychological barrier of 100,000 dollars.
The daily chart's Relative Strength Index (RSI) is near the neutral 50 level, indicating that there is no strong sentiment in either direction in the short term.
For the continuation of bullish sentiment, it would be good if the RSI rises above the neutral level.
At the same time, the MACD indicator showed a bullish crossover at the end of November, and this is still valid – supporting bullish views.
If BTC continues its correction, the first significant support level is 85,569 dollars, which coincides with the 78.6% Fibonacci level.
