Bitcoin in a Fragmented Market: Fed Signals Pause and Institutions Continue to Accumulate

Bitcoin CRYPTO000BTC

The latest Federal Reserve decision rattled the Bitcoin scene just as the year closes. Even with another rate cut, price action pointed downward while major investors kept buying. How do these opposing forces coexist, and what does it mean for the key level around $90,000?

The trigger for the current move was the Fed’s most recent rate decision. The central bank trimmed the policy rate by 25 basis points to a range of 3.50% to 3.75%. The real story, however, was the guidance: for January 2026 the Fed signaled a pause and indicated only a single additional cut could come in the following year.

That “higher for longer” stance hit leveraged market players particularly hard. In the hours after the FOMC announcement, Bitcoin briefly dipped below the $90,000 mark. Market data show more than $250 million in long positions were forcibly liquidated within a four-hour window. Over the past 24 hours, total crypto liquidations ran to about $496 million, with Bitcoin contributing the largest share.

Bitcoin currently trades around $90,273—well below the roughly $98,000 50‑day moving average. The gap to the 52‑week high stands at roughly 28%, signaling that the rally of recent months has come under pressure without yet testing the year’s lows.

Technical readings point to waning momentum. The 14‑day RSI sits at 38.1, suggesting neutral to modestly negative near-term sentiment. On the downside, support around $85,569 comes into focus if the 90,000 level cannot hold, while resistance above sits near $94,253 as the first hurdle after the latest pullback.

ETF Flows Despite the Pullback

What stands out is that institutional appetite has not diminished despite the price wobble. On Wednesday, just ahead of the Fed decision, US spot Bitcoin ETFs posted net inflows totaling $224 million.

A large portion of that came into BlackRock’s IBIT, which attracted roughly $193 million and grew its assets under management to over $62 billion. Market participants interpret this as evidence that professional investors are using price drops to scale into longer-term positions, rather than viewing macro risks as a reason to abandon the core investment thesis.

There is a clear divergence:
- On the price side, weakness follows a Fed move, with additional pressure from derivatives liquidations.
- On the ETF side, persistent net inflows, especially into large products like IBIT.

Taken together, the picture is one of short‑term pressure stemming from leverage, while unleveraged, long‑term investors maintain or even expand exposure.

On-Chain Signals: Less Pressure from “Whales”

On-chain observations back this interpretation. The portion of inflows to crypto exchanges coming from “whales”—large addresses typically associated with institutional or high-net-worth holders—has diminished noticeably.

The Whale-Exchange Inflow Ratio is now at 21%, down from 47% in mid‑November. This suggests the recent selling pressure was not driven by major long-term holders moving large quantities to exchanges to unload, but rather by cascading effects from over-leveraged futures positions.

In short: the selling pressure appears to be largely mechanical rather than a broad exodus by big investors.

Regulation: Banking-World Tailwinds

Against the backdrop of volatility, the push to integrate Bitcoin into mainstream finance continues to gain traction, offering a structural counterweight to short‑term macro headwinds.

Two developments stand out:
- Banking integration: PNC Bank is expected to begin offering direct Bitcoin trading for customers this month, representing another step in widening access for retail and high‑net-worth clients alike.
- OCC guidance: The OCC’s Interpretive Letter 1188 clarifies that national banks can act as intermediaries in crypto transactions, without facing the stricter controls seen in earlier years. This reduces regulatory obstacles to deeper crypto‑bank integration.

These shifts function as structural support: they make it easier for traditional financial institutions to include Bitcoin in their offerings and could spur additional demand regardless of near-term rate or sentiment swings.

Mood and Outlook for Year-End

Market sentiment cooled under the impact of the Fed remarks and softer tech sentiment. The Crypto Fear & Greed Index sits at 26, signaling a clearly “Fear”‑leaning environment. Concerns include the possibility that the Fed’s 2026 easing may be more muted than anticipated and that the heightened investment activity in AI could slow.

Technically, Bitcoin sits at a pivotal juncture. The $90,000 zone remains a focal point, balancing near‑term selling pressure from derivatives with continued inflows into spot ETFs and reduced selling pressure from on‑chain addresses. Looking to the final weeks of the year, scenarios hinge on whether macro-driven swings dominate or whether structural demand strengthens, potentially guiding prices toward the $85,000 support level or back toward the $95,000 area.