Bitcoin climbed back above $85,000 this week, reaching its highest level in over a week as the Federal Reserve signaled a slowdown in its quantitative tightening program. The central bank’s decision to maintain interest rates steady while reducing the pace of balance sheet reduction provided a tailwind for risk assets, with BTC gaining 20% in five trading sessions. Analysts attribute the rally to renewed confidence in macroeconomic stability, noting the Fed’s pivot aligns with market expectations for fewer liquidity constraints.
The Fed’s adjusted strategy caps monthly Treasury runoff at $25 billion starting in April, down from $60 billion, marking the first reduction in asset roll-off since the pandemic-era stimulus unwinding began. This shift follows three consecutive days of inflows into Bitcoin ETFs totaling $512 million, reversing a prolonged outflow trend. On-chain data reveals large wallet investors capitalized on the news, executing $42.9 billion in transactions over $100,000—a 40% weekly surge in whale activity.
Despite the momentum, Bitcoin faces immediate resistance near $90,000, a level that has acted as both technical and psychological barrier since early March. Traders note the cryptocurrency must close above its 200-day moving average at $84,200 to confirm bullish momentum. Recent volatility saw BTC briefly spike to $85,900 before retreating 4% amid profit-taking following political commentary about crypto regulations.
Market observers remain divided on sustainability. While some highlight historical patterns showing Bitcoin typically peaks 18 months post-halving—suggesting potential upside through late 2025—others warn upcoming inflation data and geopolitical tensions could trigger renewed selling pressure. Derivatives markets reflect cautious optimism, with open interest climbing 15% alongside rising put/call ratios indicating balanced hedging activity.
The SEC’s unexpected dismissal of charges against Ripple Labs and growing institutional adoption through regulated investment vehicles like BlackRock’s IBIT ETF provide fundamental support. With Bitcoin now holding above critical support at $82,000, analysts suggest a decisive break above $90,000 could catalyze another leg toward record highs.
Sources:
https://cryptomus.com/blog/bitcoin-reclaims-85k-will-it-recover-to-90k-news
https://www.morningstar.com/stocks/what-feds-qt-program-is-why-its-end-matters
https://www.ainvest.com/news/bitcoin-surges-20-85-000-fed-policy-market-rally-2503
https://www.richmondfed.org/publications/research/econ_focus/2022/q3_federal_reserve
https://www.tradingnews.com/news/bitcoin-price-jumps-to-85k-usd-can-btc-break-trhough-90k-usd
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