Bitcoin's $90,000 Halt: Why the Rally Stalled Despite Positive Macro Signals
The macroeconomic landscape appeared to be shifting in Bitcoin’s favor. US inflation cooled more than expected, the Federal Reserve delivered its third consecutive interest rate cut, and even the Bank of Japan loosened its decades-long grip on monetary policy without triggering a market meltdown. Yet, Bitcoin (BTC) has struggled to capitalize, briefly touching $90,000 on December 22nd before stalling, exhibiting the same choppy trading range that has defined the fourth quarter. This disconnect begs the question: if easing monetary conditions aren’t igniting a rally, what’s holding Bitcoin back? The answer lies in a complex interplay of factors – flawed economic data, persistently high real yields, and inherent structural vulnerabilities within the Bitcoin market itself.
The "Good News" Comes with Asterisks
November’s Consumer Price Index (CPI) report initially provided the headline figures investors wanted: 2.7% year-over-year (compared to an expected 3.1%), with core inflation at 2.6% against a consensus of 3.0%. This marked the lowest core reading since 2021 and the first time headline inflation clearly settled within the 2%-3% band. However, a critical caveat exists. Due to a six-week government shutdown in the US, the October CPI was never published, and a significant portion of November’s data relied on estimations rather than actual observed prices.
Specifically, rents and certain services were based on modeled data, raising concerns about the report’s accuracy. Experts cautioned against interpreting this as a definitive shift in the inflationary regime. Fed Governor John Williams echoed this skepticism, describing the CPI print as “encouraging” but explicitly acknowledging that both inflation and unemployment data remain distorted by the shutdown-related gaps. He further indicated “no immediate need” for additional rate cuts, characterizing current policy as “well balanced” – a far cry from a green light for aggressive easing.
This cautious stance from the Fed suggests that traders are unlikely to aggressively front-run a substantial liquidity wave based on a single, potentially flawed report. The market is awaiting a cleaner January CPI print to determine whether November’s data represents a genuine downshift in inflation or merely a temporary blip.
Real Yields Remain a Significant Headwind
Even with the recent rate cuts and softening inflation, the underlying macroeconomic plumbing remains relatively tight. As of December 22nd, the 10-year Treasury Inflation-Protected Securities (TIPS) yield hovered around 1.9%, while the average long-term real rate stood in the 1.5%-2% range. This is significantly higher than the negative real rates observed during 2020 and 2021, keeping the discount rate on long-duration risk assets elevated.
While the Federal Reserve ended its quantitative tightening (QT) program on December 1st, quantitative easing (QE) has not resumed. Bank notes confirm that Treasury and Mortgage-Backed Securities (MBS) runoff has ceased, but the next phase is described as “reserve management” through limited purchases, not a substantial balance sheet expansion. The H.4.1 release from December 18th shows total Fed assets around $6.56 trillion, a decrease of roughly $350 billion over the past year.
Governor Williams emphasized that any new asset purchases are “technical” and “not QE,” aimed at maintaining orderly money markets rather than engineering a risk-asset rally. The direction of travel has shifted from tightening to less tightening, but real yields remain positive, and the Fed isn’t injecting fresh liquidity into the system.
The Bank of Japan's Hike: A Tentative Step
The Bank of Japan’s (BoJ) move to raise rates to 0.75% was widely anticipated and framed by Governor Kazuo Ueda as a gradual normalization of policy. This marks the highest Japanese policy rate in three decades, with 10-year Japanese Government Bond (JGB) yields reaching a 26-year high.
Macro desks are already analyzing the potential “yen-carry” implications, suggesting that further rate hikes could trigger unwinds of carry trades and forced de-risking across global assets, including Bitcoin. However, the yen has actually weakened again, as Ueda stressed a gradual approach. This provides traders with some breathing room but leaves latent stress within the system. The BoJ has removed the zero-rate anchor but hasn’t yet tightened the chain.
Traders are aware that a genuine carry squeeze could lead to 20%-30% drawdowns, making them hesitant to increase leverage simply because the first hike landed without significant disruption.
Bitcoin's Internal Liquidity Concerns
Macroeconomic conditions explain part of the muted response, but Bitcoin’s internal structure contributes significantly. Glassnode’s Week 50 report highlights that BTC is range-bound due to substantial underwater supply between approximately $93,000 and $120,000, fading demand, and increasing loss realization whenever the price attempts to rally.
Bitcoin’s aggregated 2% market depth has fallen by approximately 30% from its 2025 peak, declining from roughly $766 million in early October to around $569 million by early December, coinciding with $3.5 billion in ETF outflows during November. Furthermore, buying liquidity is “depleting,” with coins primarily circulating among existing holders rather than being absorbed by new capital.
October’s surge to $126,000 largely pre-priced much of the “good news.” What remains is a market with thinning depth, volatile ETF flows, and a substantial band of underwater supply above the current spot price.
What This Means for 2026
The macroeconomic environment is no longer hostile, but it doesn’t offer the unambiguous, balance sheet-driven boom that characterized 2020-21. Softer inflation and three Fed cuts would typically be powerful catalysts, but this time, the CPI data is questionable, the Fed is signaling caution, and real yields remain positive. The shift from QT to neutral policy hasn’t yet translated into a genuine liquidity wave.
The BoJ’s first rate hike in three decades removed the psychological zero-rate anchor that fueled global carry trades, creating an overhang on all leveraged risk trades. Within the crypto market, investors are awaiting either a decisive macroeconomic shift or a substantial influx of new liquidity, rather than relying on another positive headline.
Bitcoin is behaving more like a maturing macro asset, responsive to conditions but not explosively bullish. In this gap between softer data and persistently tight real conditions, the anticipated boom hasn’t materialized.
Bitcoin Market Data
As of 10:02 am UTC on December 23, 2025, Bitcoin is ranked #1 by market capitalization, with a price down 2.44% over the past 24 hours. Bitcoin has a market capitalization of $1.75 trillion and a 24-hour trading volume of $44.61 billion. Learn more about Bitcoin.
Crypto Market Summary
As of 10:02 am UTC on December 23, 2025, the total crypto market is valued at $2.96 trillion, with a 24-hour volume of $103.81 billion. Bitcoin dominance is currently at 59.00%. Learn more about the crypto market.
Mentioned in this article: Bitcoin, Glassnode
Posted In: Bitcoin, US, Analysis, Featured, Macro, Market, Price Watch
Author: Gino Matos, Reporter • CryptoSlate
Editor: Liam 'Akiba' Wright, Editor-in-Chief • CryptoSlate