Bitcoin Struggles Below $100K as Fed’s Hawkish Rate Cut and Fragile Market Structure Signal Extended Consolidation
Bitcoin is still trading around $91,000, but it has dropped about 1% in the last 24 hours. Analysts say the cryptocurrency is stuck in a
Quick overview
- Bitcoin is currently trading around $91,000, having dropped about 1% in the last 24 hours amid a structurally fragile market.
- The Federal Reserve's recent rate cut has led to internal disagreements, raising concerns about economic growth and inflation.
- Bitcoin is trapped in a critical range between $102,700 resistance and $81,300 support, with increasing unrealized losses indicating market stress.
- The outlook for Bitcoin remains bearish, with a 70% probability of staying below $100,000 until the end of January, as long-term holders continue to take profits.
Bitcoin BTC/USD is still trading around $91,000, but it has dropped about 1% in the last 24 hours. Analysts say the cryptocurrency is stuck in a “structurally fragile range” after the Federal Reserve made its latest decision about monetary policy. Even though the interest rate was dropped by 25 basis points on Wednesday, the third time this year, the market has become apprehensive because of indicators that on-chain fundamentals are eroding and the Fed’s view is split.
Divided Federal Reserve Delivers Hawkish Cut
The Federal Reserve’s decision to decrease rates by 0.25% was remarkable because it was a 9-3 vote split, which shows that there is disagreement inside the Fed about what to do next. Two members of the committee voted to keep rates at 4%, which is an unusual disagreement that shows worries about rising prices and poor economic development. During the press conference after the meeting, Fed Chair Jerome Powell said that there are still dangers associated with a sluggish labor market and high prices.
The central bank established a $40 billion program to buy short-term government bonds to help control liquidity levels. However, the hawkish tone has made them less hopeful for big rate reduction in 2026. This uncertainty seems to have limited Bitcoin’s potential for growth, as the cryptocurrency couldn’t keep up with Monday’s brief rise beyond $94,000.
Technical Structure Shows BTC Trapped in Critical Range
Based on a lot of data from Glassnode, Bitcoin is still stuck between two important levels: the short-term holding cost basis at $102,700, which acts as resistance, and the “True Market Mean” at $81,300, which acts as support below. This narrow zone has made things quite dangerous, and it seems like time is working against bullish momentum.
The relative unrealized loss metric has reached 4.4% on a 30-day simple moving average. This is the first time in two years that this indicator has gone above 2%. This change means that the market is becoming more stressful, and the growing unrealized losses make it more likely that people will have to sell.
More worrying, entity-adjusted realized losses have risen to $555 million per day, which is the highest level since the FTX crash in November 2022. At the same time, long-term holders who have held their stocks for more than a year have been taking profits aggressively, making more than $1 billion a day and reaching a record high of $1.3 billion.
Spot-Led BTC/USD Rally Lacks Derivative Market Support
CryptoQuant’s study shows that the market is acting in a way that is worrying. Bitcoin’s price has gone up from its low of $92,700 on November 21, but open interest in BTC futures has kept going down. This pattern shows that the rally has mostly been caused by spot purchasing and not leveraged speculation, which is something that has traditionally had trouble keeping upward momentum going.
Spot trading volumes are only 10% of derivatives activity, therefore the market has structural problems keeping bullish pressure up without more leveraged traders becoming involved. The fact that open interest keeps going down even when prices are going up shows that smart market players aren’t very sure of themselves.
Derivatives Markets Price In 70% Probability of Sub-$100K Bitcoin
Bitcoin options markets show an even more worrying picture for how prices will move in the near future. The premium on $100,000 call options that expire on January 30 has dropped from $12,700 a month ago to only $3,440. This means that Black-Scholes pricing models say there is a 70% chance that Bitcoin will stay at or below $100,000 until the end of January.
Even though the Fed’s balance sheet increase has made liquidity circumstances better, this mistrust continues. Bitcoin has done far worse than gold during this time, which makes many wonder if it is a good way to protect against inflation or store value when the economy is uncertain.
Bitcoin Price Outlook: Range-Bound Until New Catalyst Emerges
Bitcoin is expected to stay in a range for a while because on-chain indicators are getting weaker, fewer people are trading futures, long-term holders are taking a lot of profits, and derivatives are pessimistic. The main resistance band between $95,000 and $102,000 is a tough barrier that needs both a better market structure and a clear positive catalyst to be broken through.
The Fed’s loosening of monetary policy could help risky assets in the long run, but the short-term outlook seems tough. Traders should keep an eye out for either a clear break above the short-term holder cost basis at $102,700 or a possible retest of support at the True Market Mean at $81,300. Bitcoin’s route to getting back to $100,000 looks harder and harder in the next weeks, until the market structure gets better and realized losses stabilize.
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