Bitcoin Price Struggles to Break $94K Despite Federal Reserve's Policy Changes

Bitcoin rallies fail at $94K despite Fed policy shift: Here’s why

This week, Bitcoin's price has been lackluster after another unsuccessful attempt to surpass the monthly volume-weighted average price (VWAP). Currently, BTC is consolidating around $90,000, following a 0.25% interest rate cut by the Federal Reserve. The market continues to struggle with any significant push above $93,000, reducing bullish momentum.

Key Takeaways:

An analyst has noted that the contraction in liquidity is limiting Bitcoin's potential for growth, causing demand to fall behind sell pressure.
The range between $94,000 and $98,000 remains crucial, but BTC must avoid a bearish break below $88,000.

According to analyst Darkfost, Bitcoin’s challenges are largely linked to declining liquidity, particularly from stablecoins. The inflow of stablecoins onto exchanges is a strong indicator of incoming capital, and current data shows that this signal is flashing red.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Bitcoin Futures, Price Analysis, Market Analysis Bitcoin one-day chart. Source: Cointelegraph/TradingView

Understanding Market Behavior: The Role of Liquidity Compression

Recent data indicates a significant drop in liquidity: inflows of ERC-20 stablecoins have plummeted from $158 billion in August to about $76 billion this month, marking a near 50% decline. The longer-term 90-day average has also decreased from $130 billion to $118 billion, suggesting this trend is not just temporary but a sign of a deteriorating market condition.

This liquidity contraction has led to weaker buying power. Darkfost explains that recent price rebounds aren’t driven by substantial accumulation; instead, they occur during intervals of decreased selling. This indicates a lack of fresh capital needed to support higher price levels or defend essential support zones. Thus, Bitcoin’s price rallies are expected to remain shallow until new liquidity enters the market.

Additionally, trader DaanCrypto pointed out that the overall liquidity landscape still shows the $97,000–$98,000 area as the next significant price target. However, with Bitcoin continuously unable to break past $94,000—the first hurdle for any increase in volatility— the market stays at risk of sharp reversals that can affect both long and short positions.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Bitcoin Futures, Price Analysis, Market Analysis Stablecoin exchange inflows. Source: CryptoQuant

Related: Prediction markets bet Bitcoin won’t reach $100K before year’s end

Bitcoin Approaches a Critical Breakdown Point at $90,000

From a structural viewpoint, Bitcoin has failed to break the $93,000 level three consecutive times. The most recent rejection created a clear swing failure pattern (SFP) after the Federal Open Market Committee (FOMC) meeting. This pattern indicates market exhaustion and emphasizes the ongoing weakness in maintaining upward trends.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Bitcoin Futures, Price Analysis, Market Analysis Bitcoin one-hour chart analysis. Source: Cointelegraph/TradingView

Furthermore, Bitcoin is nearing the confirmation of a bearish rising wedge pattern, which would activate if the price drops below $88,000 and triggers a bearish break of structure (BOS). Such a breakdown could expose an external liquidity sweep around $84,000, with potential losses extending to the quarterly lows of $80,600, a level that correlates with previous inefficiencies on higher timeframes.

Despite these bearish indicators, bullish traders like Captain Fabik believe that BTC is undergoing strategic shakeouts designed to eliminate weak players in the market. For a bullish recovery, BTC needs to achieve a weekly close above $90,000 and ideally approach $93,000. Securing this level could give bulls the structural advantage needed to target the $96,000 breakout area, where a momentum expansion could finally occur.

Cryptocurrencies, Bitcoin Price, Markets, Cryptocurrency Exchange, Bitcoin Futures, Price Analysis, Market Analysis BTC 1-day analysis by Captain Fabik.

Related: Bitcoin due 2026 bottom as exchange volumes grind lower: Analysis