Bitcoin Weekly Outlook: Fed's Decision Leaves BTC Traders Uninspired

Bitcoin (BTC) remains in a consolidation phase as it trades around $90,000, following the Federal Reserve’s cautious rate cut in December and its potential effects on risk assets.

Key Takeaways:

Bitcoin is trading around $90,000, with a potential for consolidation amid the Fed's cautious policy announcements.
Geopolitical tensions are contributing to a limited risk-on environment for BTC.
Institutional inflows into Bitcoin ETFs have shown mild improvement compared to last week, indicating growing interest.
Selling pressure is easing, possibly paving the way for a relief rally.
December historically tends to yield positive returns for Bitcoin, although the current quarter has shown disappointing results so far.
Technical analysis suggests BTC may be approaching a bottom, yet further movement hinges on key resistance and support levels.

At present, BTC's price is approaching a critical descending trendline that may influence its next movement. Institutional investments in Spot Bitcoin ETFs have seen slight inflows, and Strategy Inc. has increased its Bitcoin treasury reserves.

Fed's Decision Sparks BTC Consolidation

Bitcoin started the week positively, building on a recovery trend from the weekend and maintaining higher levels, peaking at $92,600 on Tuesday. However, momentum waned on Wednesday, with BTC closing at $92,015 after the Federal Open Market Committee (FOMC) meeting.

In a widely anticipated move, the Fed reduced interest rates by 25 basis points. However, the FOMC indicated a likely pause in rate cuts for January. Policymakers projected only a modest cut for the overall 2026 outlook, mirroring previous expectations from September. This led to tempered market forecasts of additional rate cuts and exerted short-term pressure on riskier assets. The combination of the Fed's cautious stance and disappointing earnings from Oracle resulted in a brief downturn in the market, causing Bitcoin to dip to a low of $89,260 before rebounding, closing above $92,500 on Thursday. As there are no major US economic data releases anticipated, the crypto markets are now looking to FOMC member speeches and overall market sentiment for direction toward the end of the week. BTC is expected to remain in consolidation unless a significant catalyst presents itself.

Geopolitical Tensions and Their Effects

On the geopolitical front, U.S. President Donald Trump expressed strong frustration regarding the ongoing issues between Russia and Ukraine, according to his spokeswoman. Ukrainian President Volodymyr Zelenskyy mentioned that the U.S. is urging Ukraine to relinquish land to Russia in hopes of ending a nearly four-year conflict. These ongoing geopolitical uncertainties, paired with stalled peace negotiations, have contributed to a dampened risk sentiment that affects Bitcoin's performance this week.

Institutional Interest Shows Mild Improvement

There are some signs of rising institutional interest in Bitcoin. Data from SoSoValue indicates that U.S.-listed Spot Bitcoin ETFs experienced inflows totaling $237.44 million through Thursday, a contrast to the mild outflow of $87.77 million from the previous week, suggesting an improvement in institutional investor interest. However, these inflows remain minimal compared to figures seen in mid-September; for BTC to regain its upward momentum, ETF inflows need to increase significantly.

On the corporate side, Strategy Inc. (MSTR) announced on Monday that it had purchased 10,624 Bitcoin for $962.7 million from December 1 to 7, averaging $90,615 per coin. The firm currently holds 660,624 BTC, valued at approximately $49.35 billion, and still possesses considerable capacity to raise additional funds for further Bitcoin acquisitions.

On-Chain Data Indicates Reducing Selling Pressure

CryptoQuant’s weekly report released on Wednesday notes that Bitcoin's selling pressure appears to be easing. The report highlights a decrease in exchange deposits, attributed to large players reducing their transfers to exchanges. The percentage of total deposits from large holders dropped from a 24-hour average high of 47% in mid-November to 21% by Wednesday. Additionally, the average deposit amount fell by 36%, from 1.1 BTC on November 22 to 0.7 BTC now.

If selling pressure continues to subside, CryptoQuant predicts a potential relief rally for Bitcoin, perhaps pushing its price back to $99,000, which is seen as a resistance level during bear markets. Beyond this, significant resistance levels are expected at $102,000 (the one-year moving average) and $112,000 (the Trader On-chain Realized price).

Copper Research's report has also shown positive signals for Bitcoin, suggesting that the cryptocurrency's four-year cycle remains intact, despite facing recent challenges. Since the introduction of spot ETFs, Bitcoin has engaged in consistent Cost-Basis Return Cycles, indicating a potential for recovery.

Could December Bring a Bitcoin Rally?

Bitcoin saw a 17.67% decline in November, disappointing traders who anticipated a bullish turnaround based on historical trends. December has typically been favorable for Bitcoin, offering an average return of 4.55%. When looking at quarterly trends, the fourth quarter has historically generated the highest average return for Bitcoin at 77.38%. However, performance during the final quarter of 2025 has been less than stellar, with a reported 19% loss to date.

Are We Approaching a Bottom for BTC?

Bitcoin's weekly chart indicates that the price is stabilizing around the 100-week Exponential Moving Average (EMA) at $85,809, with two consecutive green candles following a four-week downward adjustment starting in late October. Currently, BTC is trading slightly above $92,400. If the upward movement continues, it could extend toward the 50-week EMA at $99,182.

The Relative Strength Index (RSI) for the weekly chart is currently at 40, trending upward, which shows diminishing bearish momentum. For the rally to persist, it needs to surpass the neutral level of 50.

On the daily chart, Bitcoin encountered resistance at the 61.8% Fibonacci retracement level at $94,253. However, it rebounded after testing the psychological support level of $90,000. A breakthrough above the descending trendline formed by previous highs since early October and closing above $94,253 could lead to a rally toward the $100,000 psychological threshold. The daily RSI remains stable around the neutral zone, indicating a lack of immediate momentum either way.

Conversely, the Moving Average Convergence Divergence (MACD) has shown a bullish crossover consistent since late November, supporting a positive outlook for Bitcoin.

If BTC resumes its downward trend, the initial key support level is at $85,569, which aligns with the 78.6% Fibonacci retracement level.