Bitcoin holds $90,000 as markets await Fed rate cut decision and Powell’s guidance
Bitcoin hovered near $90,000 on Tuesday as crypto markets entered a low-conviction holding pattern ahead of the Federal Reserve’s final policy decision of the year, with analysts noting that Chair Jerome Powell’s forward guidance tomorrow may matter more than the rate cut itself.According to The Block’s prices page, BTC has traded in a narrow $88,000 to $93,000 band recently as liquidity thinned and broader risk markets paused. ETH held around $3,100 on Tuesday, while BNB dipped to $886 and Solana traded near $132. Total crypto market capitalization slipped to roughly $3.1 trillion amid lingering uncertainty.ETF flows signal rotation, not capitulationETF flows added nuance to otherwise quiet markets.Bitcoin ETFs recorded another $60 million in net outflows on Monday, while ETH, SOL, and XRP products saw inflows of $35 million, $1 million, and $38 million, respectively, according to data compiled by The Block.BRN Head of Research Timothy Misir said the flows point to selective positioning “rather than broad de-risking,” with altcoins attracting interest even as BTC continues to lag.Market structure indicators also remain mixed. Misir noted that spot cumulative volume delta fell from -$40 million to -$111 million as persistent sell flow met a resilient spot price.The situation reinforces the view that early signs of recovery are forming, but conviction is not, the BRN analyst suggested.“Active addresses are stabilizing, and transfer volume is rising, which shows that the market is healing, but not yet healthy,” Misir wrote in a Tuesday note. “Early-stage recovery signals are visible, but confidence is not.”Markets frozen ahead of the Fed's decisionMisir described this as a “binary macro week,” with traders effectively sidelined until the FOMC decision on Wednesday.Rate-cut expectations are high, supported by softer ADP data and deteriorating consumer sentiment, though household pessimism and record U.S. consumer credit readings complicate the demand outlook.Nansen Principal Research Analyst Aurelie Barthere told The Block that markets are “expecting a rate cut that is already priced in,” and that Powell’s guidance will be more important than the potential cut.She expects the Fed’s Summary of Economic Projections to keep the long-run rate near 3%, reflecting a divided committee, and said Bitcoin is likely to hover around the $91,000 band without a decisive break immediately after the meeting.High probability of a December rate cut | Image: CME FedWatch ToolMark Pilipczuk, CMO at Kraken-owned CF Benchmarks, added that Fed expectations are driving a distinct divergence across digital assets. He said altcoins continue to lag behind Bitcoin, with investors remaining cautious ahead of the decision. Pilipczuk noted that Fed funds futures currently price in a cut on Wednesday but no additional move until June.However, the analyst argued that there is room for upside “should the Fed signal that there is potential for another cut before the June meeting,” especially if labor-market data continues to soften and inflation expectations remain anchored in the 2–3% range.Derivatives, liquidity, and holiday volatilityIn a Dec. 8 update, QCP Capital said whipsaw weekend trading — which sent BTC from $88,000 to $92,000 and ETH from $2,910 to $3,150 — illustrated how shallow liquidity has become as year-end approaches.Despite the rapid swings, liquidations have been muted and lower than typical levels earlier this year.Perpetual futures open interest has also collapsed, with BTC OI down more than 44% from October and ETH down more than 50%. This is evidence that traders have stepped back, the QCP analysts said.Retail participation also continues to fade, with Google search activity for “crypto” and “BTC” returning to bear-market territory.Meanwhile, institutions like Michael Saylor’s Strategy and whales remain the steady accumulators. Roughly 25,000 BTC has exited centralized exchanges over the past two weeks, and collective holdings of ETFs and corporate treasuries now surpass the amount of BTC held on exchanges — further tightening the free float, according to the trading firm.QCP said a “quiet supply squeeze” is forming beneath the surface as long-term buyers soak up available inventory while short-term traders pull back. But without a macro catalyst, BTC remains range-bound.Fed as the decisive catalystAnalysts broadly agree that Powell’s message — not just the rate decision — will set the week’s first real trend.A more hawkish tone or hints of fewer cuts ahead could push BTC back toward the $88,000 area. Conversely, a supportive signal, or confirmation that policy easing remains on track, could open a move into the $93,000 to $95,000 range, and potentially toward $97,000 to $106,000 if momentum builds, according to BRN's Misir.For now, the market sits in stasis. Misir described the setup as “structurally supported but directionally undecided,” with whales accumulating, retail overextended, and spot flows still negative. Until Powell speaks, he said, the prevailing mode is “patience, optionality, and controlled exposure.”Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. 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