Bitcoin Price Analysis: BTC Loses Momentum As Fed Leaves Interest Rates Unchanged, More Downside On The Way? 

Bitcoin’s (BTC) upward push stalled as the Federal Reserve kept interest rates unchanged, with the flagship cryptocurrency giving up earlier gains. BTC briefly crossed $90,000 on Wednesday, reaching an intraday high of $90,339. 

However, it lost momentum after reaching this level and dropped to $87,710 early on Thursday before moving to its current level of $87,903, down over 1%. 

Trading has remained subdued over the past 24 hours as the rally of gold, silver, and copper overshadowed the cryptocurrency market, leaving Bitcoin stuck between $88,000 and $90,000. 

Federal Reserve Holds Interest Rates Steady 

The Federal Reserve kept interest rates unchanged on Wednesday, a decision that likely contributed to Bitcoin’s and the broader cryptocurrency market’s decline. The Fed stated that job numbers have remained low while inflation has been above acceptable limits. 

Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated.

However, Trump appointees Stephen Miran and Chris Waller dissented with the decision, preferring a 25bps rate cut. BTC remained pinned below $90,000 following the decision, which knocked the wind out of any expected recovery. Prediction markets had put the odds of a January rate cut at 40%, but hopes of a rate cut quickly faded, with markets pricing in no change to the rates at 99% heading into the meeting.

The market is not expecting a rate cut in March as well, with the CME FedWatch putting the odds of a March rate cut at just 16%. However, the chances of a rate cut in April are higher at 40%. Nick Ruck, Director of LVRG Research, stated, 

The U.S. Federal Reserve’s decision to hold interest rates reflects persistent inflation concerns and a stabilizing economic backdrop, likely resulting in near-term volatility for crypto markets as liquidity remains supportive. If Chair Powell’s press conference conveys a cautious ‘higher-for-longer’ stance or hints at fewer cuts ahead in 2026, we could see short-term pressure on risk assets, including bitcoin.

Oil Rally Could Spell Trouble For Bitcoin 

After gold and silver, Bitcoin (BTC) may have to deal with an oil rally that could blow the bulls out of the water, making conditions favorable for the bears. Data shows that the per-barrel price for the West Texas Intermediate (WTI) has risen 12% to $64.30 this month, the highest since September. Meanwhile, Brent has also seen a similar spike to $68.22. The rally could be a challenge for Bitcoin bulls relying on steady inflation and low interest rates for a rally. Oil is crucial for everyday goods and services; an increase in its price raises costs across markets. 

Higher oil prices increase the cost of gasoline, raising transportation costs. This has a domino effect that raises the price of everything, including food deliveries, clothes, electronics, and more, which are passed on to the consumer. According to the Federal Reserve’s explainer, 

We find that oil price pass-through to inflation is both economically and statistically significant, and that it occurs both directly and through second-round effects. Higher energy prices can also raise consumer and business expectations for future inflation, indirectly raising food and core prices now.

According to analysts, rising fears of an imminent US strike on Iran, a major oil producer, and low US inventories are pushing prices higher. 

Strive Announces 334 BTC Purchase 

Bitcoin treasury company Strive has announced the purchase of 333.9 BTC following a preferred stock offering. The company also revealed it had retired 92% of the debt inherited from the Semler Scientific purchase. Strive stated it received $600 million in demand for its Variable Rate Series A Perpetual Preferred Stock, upsizing its target raise from $150 million to $225 million in response. Strive finalized its acquisition of Semler Scientific on January 13, after agreeing to a merger in September. 

The Vivek Ramaswamy-backed company had said earlier this month that it planned to use the proceeds from its offering to retire $110 million or 92% of the debt inherited from Semler’s purchase. This included a $90 million of convertible notes exchanged for SATA stock and the repayment of a $20 million Coinbase credit loan. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) briefly crossed $90,000 on Wednesday before losing momentum and dropping to a low of $87,710. The flagship cryptocurrency is currently trading around $87,716, down nearly 2% over the past 24 hours. BTC is trading within a narrow range, with buyers preventing a decline towards the $85,000 level. Meanwhile, futures market data suggests a potential short-term liquidity grab near the $93,500 mark. 

However, Glassnode analysts have ruled out a sustained recovery, arguing that liquidity must first reach a specific threshold. According to Glassnode, a sustained rally must be reflected in liquidity-sensitive indicators, like the realized profit/loss ratio. The analytics platform highlighted that strong recoveries only occurred when the metric was above 5, signalling continued liquidity inflows and capital rotation into Bitcoin. The platform also highlighted the supply stress on BTC, stating that more than 22% of the asset’s circulating supply was currently held at a loss. 

Meanwhile, data from CryptoQuant indicates that traders are still holding the asset. Monthly BTC inflows to Binance currently average around 5,700 BTC, half the long-term average of 12,000 BTC. Exchange inflows are generally associated with selling, and low exchange inflows suggest investors are holding rather than selling. This reduces the risk of any immediate downside. One crypto analyst added, 

This historically low level of BTC inflows represents a rather positive signal. Despite a period of Bitcoin consolidation and growing macroeconomic uncertainty, investors appear more inclined to hold their BTC.

BTC ended the previous weekend in the red, dropping 1.55% to $93,633. Sellers retained control on Monday as the price fell 1.15% to $92,559. Selling pressure intensified on Tuesday as BTC fell nearly 5%, slipping below $90,000 to $88,310. Despite the overwhelming bearish sentiment, the price recovered on Wednesday, rising 1.19% to $89,363. BTC registered a marginal increase on Thursday, moving to $89,463. BTC experienced considerable volatility on Friday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand as the price registered a marginal increase to $89,474.

Source: TradingView

Selling pressure returned over the weekend, and BTC fell 0.44% to $89,092. Selling pressure intensified on Sunday as the price fell nearly 3% to $86,561. Despite the overwhelming selling pressure, BTC recovered on Monday, rising almost 2% to $88,250. Buyers retained control on Tuesday with the price crossing $89,000 to $89,250, up nearly 1%. BTC experienced volatility on Wednesday, briefly crossing $90,000 before settling at $89,162. Selling pressure has returned during the ongoing session, with BTC down nearly 2% at $87,686.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.