- BTC recovered from 83.5k to 93k this week
- December Fed rate cut expectations rise to 89%
- Monetary policy dove, Kevin Hasset is the frontrunner to replace Fed Chair Powell
- Vanguard lifts crypto ban for customers
- BTC ETFs need to ramp up to sustain a recovery
Could the BoJ Send BTC Lower?
is holding steady on Thursday, having rebounded from a low of 83.5 at the start of the week to just below 93k at the time of writing. The recovery has been seen across the crypto space with the total crypto market cap rising to $3.16 trillion, up from $2.88 trillion on Monday, and an impressive 9%. But after a volatile few months, can BTC sustain this rally?
What has Driven the BTC Recovery?
The crypto sector has been boosted by rising expectations that the Fed will next week. Yesterday, showed that private payrolls were slashed by -32k, adding to evidence that the US labour market is cooling. Several Fed policymakers have highlighted labour-market weakness as a reason to cut rates in December. The market is now pricing in an 89% probability of a 25-basis-point rate reduction on December 11th.
Furthermore, President Trump has hinted that Kevin Hassett, the frontrunner to replace Federal Reserve Chair Jerome Powell in May next year, will likely get the position. Kevin Hasset’s dovish stance on monetary policy means the market expects further easing next year.
Sticking with the Fed, quantitative tightening ended on December 1st, meaning the Fed is back in the bond market and liquidity is improving. This is often good news for riskier assets such as crypto.
Regulatory changes have also supported crypto. SEC Chair Paul Atkins revealed that the innovation exemption rule is on track for crypto firms next year, aiming to strengthen the US crypto ecosystem.
Furthermore, Vanguard, the world’s second-largest asset manager, lifted the crypto ban on December 2nd, allowing 50 million users to trade crypto ETFs. This could help support BTC ETF inflows in the future.
While BTC ETFs have seen some inflows this week, these have been weak. BTC net inflows are just $52 million so far this week, after $70 million last week. However, BTC ETFs saw $3.48 billion in net outflows last month. If BTC is going to enjoy a Santa rally this month, BTC ETFs will need to ramp up significantly.
What Could Upend the Recovery?
One of the major risks to the BTC recovery could be the unwinding of the yen carry trade. The market is pricing in an 86% probability of the BoJ hiking rates next month. Japanese Treasury Yields are also on the rise. The rose to its highest level since 2007 overnight as investors fretted over PM Takaishi’s spending plans. The recent rise in yields is drawing domestic and foreign demand, which, combined with a possible rate hike later in December, could spur the unwinding of the carry trade, sucking liquidity from global markets.
Historically, when the BoJ has hiked rates, Bitcoin has fallen. BoJ lifted rates to 0.5% on January 24, and BTC slumped 17% in February. Going back to July 31, 2024, the BoJ hiked rates, and BTC fell 11% in August. Following the BoJ’s rate hike at the end of March 2024, BTC fell 14% in April.
Even if the BTC rally is sustained over the coming weeks, the BoJ presents a great risk to Bitcoin’s upside.
BTC Technical Analysis
BTC has extended its recovery from 83.5k low and is testing 94k resistance, the 61.8% Fib retracement level of the 76.6k low and 126.2k high.
Buyers supported by bullish MACD need to settle above this level to extend gains to 100k, the psychological level, and the 50% Fb retracement. This is a particularly key level, as it is also the 50 SMA on the weekly chart, which marks the boundary between the bull and bear markets. A rise above here would put BTC on a firmer footing.
Failure to rise above 94k could see a retest of 85k, the 78.6% Fib level, and 83.5k, the weekly low.
Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website / T&Cs. Some services or products may not be available in your jurisdiction. The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.
What specific institutional investment trends are most correlated with the recent Bitcoin price surge to $93K?
Bitcoin Bounces Back to $93K: Sustaining the Momentum?
The resurgence of Bitcoin: A Market Overview
Bitcoin (BTC) has once again captured headlines, surging past $93,000 in late 2025. This rally follows a period of consolidation and, for some, uncertainty. Several factors are contributing to this renewed bullish sentiment, including increased institutional investment, growing adoption of Layer-2 scaling solutions, and a perceived safe-haven status amidst global economic fluctuations. Understanding the drivers behind this price action is crucial for investors looking to navigate the volatile cryptocurrency market. Key terms driving searches include “Bitcoin price prediction,” “crypto market analysis,” and “BTC investment.”
Key catalysts Driving the Price Increase
Several interconnected factors are fueling Bitcoin’s ascent. Here’s a breakdown:
* Institutional Adoption: Major financial institutions are increasingly offering Bitcoin-related products and services.This includes spot Bitcoin ETFs, futures contracts, and custodial solutions. This influx of capital from traditional finance lends legitimacy and drives demand.
* Halving Events & Supply Dynamics: The Bitcoin halving, which occurs approximately every four years, reduces the reward miners receive for validating transactions. This programmed scarcity is a fundamental aspect of Bitcoin’s design and historically precedes notable price increases. The most recent halving in 2024 substantially impacted supply.
* Layer-2 Solutions & Scalability: Innovations like the Lightning Network are addressing Bitcoin’s scalability challenges, enabling faster and cheaper transactions. This improved functionality enhances Bitcoin’s usability and attracts a wider user base.
* Macroeconomic Factors: Global economic uncertainty, including inflation concerns and geopolitical instability, is driving investors towards alternative assets like Bitcoin. Many view Bitcoin as a “digital gold,” a store of value that is less susceptible to traditional market forces.
* Increased Retail Interest: Social media trends and positive news coverage are reigniting retail investor interest in Bitcoin. This renewed enthusiasm contributes to increased trading volume and price momentum.
Analyzing On-Chain Data: What the Metrics Reveal
On-chain data provides valuable insights into Bitcoin’s network activity and investor behavior. Several key metrics are currently signaling strength:
* Active Addresses: The number of active Bitcoin addresses is steadily increasing, indicating growing network usage.
* Transaction Volume: Transaction volume has surged alongside the price increase, suggesting heightened trading activity.
* Long-Term Holder Behavior: Long-term holders (those who have held Bitcoin for over a year) are largely remaining inactive, indicating strong conviction in the long-term prospects of the asset.This is often seen as a bullish signal.
* Exchange Inflows/Outflows: Monitoring Bitcoin flows to and from exchanges can provide clues about selling pressure and accumulation. Currently, outflows are exceeding inflows, suggesting that investors are moving their Bitcoin off exchanges and into long-term storage.
* Hash Rate: The Bitcoin network’s hash rate (a measure of computing power) remains high, ensuring network security and stability.
Potential Roadblocks and Risks to Consider
While the current outlook for bitcoin is positive, it’s essential to acknowledge the potential risks:
* Regulatory Uncertainty: Evolving regulations surrounding cryptocurrencies pose a significant risk. Unfavorable regulatory decisions could negatively impact Bitcoin’s price and adoption.
* Market Volatility: Bitcoin is known for it’s price volatility. A sudden market correction could erase recent gains.
* Security Concerns: While the Bitcoin network itself is highly secure, exchanges and wallets are vulnerable to hacking and theft.
* Competition from Altcoins: The emergence of alternative cryptocurrencies (altcoins) could perhaps challenge Bitcoin’s dominance.
* Energy Consumption: Concerns about bitcoin’s energy consumption remain a topic of debate.
Real-World Adoption: Beyond Investment
Bitcoin’s utility extends beyond speculative investment. Real-world adoption is growing in several areas:
* El Salvador’s Bitcoin Experiment: El Salvador’s adoption of Bitcoin as legal tender in 2021, while controversial, has demonstrated the potential for Bitcoin to be used in everyday transactions.
* Cross-Border Payments: Bitcoin facilitates faster and cheaper cross-border payments compared to traditional methods.
* Remittances: Bitcoin is increasingly used for remittances, notably in countries with high remittance fees.
* Decentralized Finance (DeFi): Bitcoin is being integrated into various DeFi applications, enabling lending, borrowing, and other financial services.
Practical Tips for Navigating the Current Market
For investors considering entering or expanding their Bitcoin holdings, here are some practical tips:
* Dollar-Cost Averaging (DCA): Invest a fixed amount of money at regular intervals, irrespective of the price. This strategy helps mitigate risk and smooth out returns.
* secure storage: Store your Bitcoin in a secure wallet, preferably a hardware wallet.
* Diversification: Don’t put all your eggs in one basket.diversify your investment portfolio across different asset classes.
* Stay Informed: Keep up-to-date with the latest news and developments in the cryptocurrency market.
* **Risk Management
