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This brings up two key questions. Is the macro and liquidity backdrop truly supportive, or has the market already priced it in? And from a technical view, is this bounce turning into a real trend change, or is it only a pause in the broader decline?
The big story this week is the Fed’s 25 basis point rate cut and its more cautious message for 2026. The decision created a supportive backdrop for risky assets, but the market had already priced in this move. Because of that, Bitcoin reacted more to expectations than to the actual announcement.
Trading has shifted back to watching data and news flow. Liquidity had improved earlier with the end of quantitative tightening and strong repo activity, which helped the overall setup. Even so, this support has not driven the price on its own in the short term.
US data added a mixed but validating tone. ADP figures pointed to some cooling, while unemployment claims stayed low, which shows the labor market still has unresolved tight spots. This strengthened the case for rate cuts and improved risk appetite. Bitcoin still remained stuck in a tight range, even with this backdrop.
A key reason is the shift in what drives the price. Fund flows such as ETF activity, institutional buying, and the regulatory climate have become more important for direction than macro signals alone.
In Asia, the PBoC’s repeated warning that crypto transactions are illegal and its focus on the risks of stablecoins helped trigger the early December sell-off. This influence faded quickly, which often happens with China-related shocks. The medium and long-term direction will still depend on US liquidity and regulation.
Two themes stand out in the crypto sector now. The first is the shift toward a more constructive regulatory tone in the US and a clearer embrace from traditional finance. The OCC’s guidance allowing banks to act as intermediaries in crypto transactions, without holding crypto on their own books, moves the industry further toward institutional adoption.
This type of update does not move prices immediately, but it strengthens the long-term foundation of the market. On the SEC side, efforts to create a more flexible framework for digital asset firms and broader ETF access for traditional institutions are also helping build medium-term confidence.
The second theme is fund flows. Since November, ETFs have seen heavy outflows, which strengthened the mood of profit-taking and risk aversion. This mindset also played a role in the sharp drop in early December. Even though risk appetite improved after the Fed meeting, Bitcoin did not deliver a strong rally.
The signal here is clear. Macro conditions give support, yet buying interest remains weak. The foundation looks healthy, but the market is still in a cautious pricing phase for now.
In last week’s technical view, the picture was clear. After the OBO target played out, Bitcoin created a solid base near 85200, which lined up with the Fib 0.786 support of the April to October uptrend. The rebound carried the price toward the $91,000 zone, which sits at the Fib 0.144 level, and $94,700 stood out as the next real test.
That structure is still in place. BTC is moving inside the $91,000 to $94,700 range, and this band has become an intimidation zone. The bounce from the lows is intact, yet the price stays under the main downward trend line. This keeps the move in the category of reaction and base building rather than a confirmed trend shift.
Current situation:
Although the short-term averages (8 and 21 EMA) have softened and turned upward after the bottom, the 3-month EMA near $101,000 is still positioned higher on the chart and the broader downtrend remains in place. It is too early to say the market has relaxed. The rise fits better as a strong reaction inside the downtrend until BTC breaks out of the band and holds above the key averages.
At the same time, the Stochastic RSI moving back into overbought territory keeps two scenarios open:
The second possibility remains fully valid as the price is still unable to produce a net close above $94,700.
Upside scenario according to the current outlook:
Downside risk:
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.