Bitcoin Price Drops Amid Fed’s Cautious Rate Cut
Bitcoin (BTC) price fell for the second day in a row on Thursday. It traded below $91,000 as investors grew cautious. The US Federal Reserve’s recent rate cut and cautious outlook triggered market weakness. Despite this, on-chain data shows selling pressure is easing. This may help Bitcoin recover soon.
Fed’s Rate Cut and Market Effect
The Federal Reserve cut interest rates by 25 basis points to 3.50%-3.75% after its two-day meeting. The Fed indicated it will likely pause rate cuts in January. Policymakers also expect just a 0.25% cut in 2026, matching their previous forecast. This cautious stance surprised markets that hoped for two cuts next year. The hawkish tone, plus Oracle’s weak earnings, caused investors to avoid risky assets. Bitcoin briefly dropped below $90,000 after closing at $92,015 on Wednesday.
Selling Pressure on Bitcoin Shows Signs of Easing
CryptoQuant’s weekly report found less selling pressure on Bitcoin. Large holders reduced moving coins to exchanges. Their share of total deposits dropped from 47% in mid-November to 21% by Wednesday. The average deposit size also fell from 1.1 BTC to 0.7 BTC. Big investors and short-term holders have faced large losses. Since November 13, whales realized net losses of $3.2 billion. Short-term holders have sold at a loss since mid-November. Usually, heavy losses lead to less selling. CryptoQuant says low selling pressure could help Bitcoin rally to $99,000. This price is a key resistance in bear markets. Above that, $102,000 and $112,000 are next significant levels.
ETF Inflows and Price Outlook
Institutional interest in Bitcoin is slightly improving. US-listed spot Bitcoin ETFs saw $223.52 million inflows on Wednesday, marking two days of inflows this week. For Bitcoin to keep recovering, inflows will need to increase.
Bitcoin recently hit resistance at $94,253, near the 61.8% Fibonacci retracement level from April to October highs. It dropped afterward and traded around $90,300 on Thursday. If Bitcoin keeps falling, support lies at $85,569, the 78.6% Fibonacci level. The daily Relative Strength Index (RSI) is 44, showing growing bearish momentum. If Bitcoin rises above $94,253, the next key target is the $100,000 psychological level.
