The recent decision by the U.S. Federal Reserve to cut interest rates has failed to provide the anticipated boost to Bitcoin’s price. Instead of igniting a fresh rally, uncertainty regarding the future path of monetary policy has taken hold, a sentiment further amplified by a major bank’s significant reduction to its long-term price targets. This cautious environment persists despite ongoing inflows into spot ETFs and emerging signs of reduced selling pressure on the blockchain itself.

Institutional Inflows Defy Price Weakness

A notable divergence is appearing between Bitcoin’s spot price and institutional investment activity. While the cryptocurrency’s value has softened, U.S. spot Bitcoin ETFs have continued to attract capital in December.

Data from Farside Investors reveals that these funds saw net inflows of $223.5 million on December 10th. BlackRock’s iShares Bitcoin Trust (IBIT) led the field, drawing $192.9 million, followed by Fidelity’s FBTC with $30.6 million. This suggests some institutional players are viewing recent volatility as a buying or accumulation opportunity.

However, the broader picture is mixed. November saw record net outflows of nearly $3.48 billion from these same products, indicating that the inflow environment is far from consistently stable.

Fed’s Cautious Stance Dampens Sentiment

Following the Fed’s 25-basis-point rate cut, Bitcoin has faced noticeable downward pressure. Although monetary easing typically supports risk assets, the central bank’s accompanying outlook proved more “hawkish” than many market participants had expected.

The Fed’s “dot plot” now signals only one additional potential rate cut for 2026. Furthermore, some Fed members project unchanged or even higher rates for the coming year. This uncertainty over liquidity conditions through 2026 is curbing risk appetite, thereby limiting bullish momentum for Bitcoin.

From a technical perspective, the market appears strained. With a Relative Strength Index (RSI) reading of 38.1, momentum is waning. The price, currently near $90,170, sits approximately 8% below its 50-day moving average of $98,063. It now trades almost 28% below its 52-week high, though it remains about 6% above its annual low.

Analyst Forecasts Paint Conflicting Pictures

Market sentiment received an additional blow from a substantial price target reduction by Standard Chartered. The bank, previously one of the more optimistic voices in the crypto space, slashed its end-2025 forecast from $200,000 to $100,000. Its 2026 target was also cut in half, from $300,000 to $150,000.

Should investors sell immediately? Or is it worth buying Bitcoin?

Analyst Geoff Kendrick cited diminished corporate treasury buying (so-called “DAT” trades) and a growing reliance on ETF inflows as the primary price driver as key reasons. This shift, he argues, makes the market more susceptible to institutional sentiment swings.

Not all analysts share this cautious view. Tom Lee of Fundstrat maintains his $200,000 target, arguing that Bitcoin remains highly sensitive to shifts in monetary policy. These positions represent two starkly different interpretations of the current landscape—from “significantly more cautious” to “steadfastly optimistic.”

On-Chain Metrics Hint at Stabilization

Some encouraging signals are emerging from blockchain data. A recent CryptoQuant report indicates that selling pressure from large holders is subsiding. The share of large deposits to centralized exchanges has declined from 47% in mid-November to just 21% currently.

Historically, a falling ratio of such deposits often precedes market stabilization, as it suggests fewer coins are being positioned for immediate sale. Combined with the ETF inflows, this points to a quieter accumulation pattern beneath the surface, even as short-term price action remains fragile.

Regulatory Landscape Continues to Evolve

Concurrently, the regulatory environment is undergoing further changes.

1. Approved Prediction Markets: The U.S. Commodity Futures Trading Commission (CFTC) has granted Gemini approval as a Designated Contract Market (DCM). This allows the exchange to offer regulated prediction markets in the U.S., including on economic data and Fed decisions, integrating crypto-native derivatives deeper into the country’s regulated financial space.

2. Digital Asset Legislation in Progress: Negotiations are underway in Washington on a comprehensive Digital Asset Market Structure Bill. The aim is to reach a compromise by Christmas 2025. A central point of contention remains delineating the regulatory authority between the SEC and the CFTC—a crucial factor that will determine the stringency of the future legal framework for numerous crypto projects.

Key Levels and Near-Term Outlook

In the short term, Bitcoin is caught between conflicting forces: a more restrictive Fed outlook, lowered long-term analyst forecasts, steady ETF inflows, and easing on-chain selling pressure. Traders are closely watching the support zone around $88,800; a decisive break below this level would increase the risk of further declines. Conversely, a sustained move above approximately $93,000 is seen as necessary to meaningfully improve the current bearish technical picture and open the door for a recovery toward the declining moving averages.

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