- Bitcoin broke below its $88K–$92K range to test $86.5K as macro forces, not crypto-specific trends, drove price action.
- A Fed rate cut and dovish liquidity moves clashed with cautious forward guidance, widening the gap with market expectations.
- AI stock repricing and potential Bank of Japan tightening added volatility, keeping traders cautious and flows selective.
Bitcoin slipped toward the lower end of its recent range this week as macro forces tightened control of price action. The move unfolded across global markets during the penultimate full trading week of 2025, following a Federal Reserve rate cut. Wintermute said Fed policy, AI sector changes, and Bank of Japan risks shaped volatility and flow behavior.
Bitcoin Breaks Its Range as Macro Pressure Builds
Bitcoin traded between $88,000 and $92,000 for weeks before breaking lower to test $86,500. Notably, the move followed repeated rejections near $94,000 earlier this month. However, buyers showed limited follow-through as traders waited for confirmation amid competing macro drivers.
Wintermute said the market continues consolidating rather than trending, despite brief rebound attempts. According to the firm, Bitcoin now tests the lower boundary while macro conditions guide positioning. As a result, traders remain cautious, favoring selective entries over strong directional bets.
Meanwhile, broader crypto prices weakened alongside Bitcoin. Ethereum, Solana, XRP, and BNB fell more sharply, with many dropping over 4% daily, CoinMarketCap data showed. This pressure added to an 8% monthly decline for Bitcoin, which traded near $85,000.
Fed Policy Shift Widens Gap With Market Pricing
Attention then turned to the Federal Reserve, which delivered a widely expected 25 basis point rate cut. Cumulative easing reached 175 basis points, the first such level since September 2024. However, the Fed’s dot plot showed only one cut expected across 2026.
Markets, however, priced closer to three cuts next year, creating a clear policy gap. Additionally, the Fed announced $40 billion in Treasury bill purchases, effectively ending quantitative tightening. Consequently, macro uncertainty remained elevated despite the completed rate decision.
AI Repricing and BoJ Risk Add to Volatility
At the same time, equity markets rotated away from crowded AI trades. Broadcom reported an earnings beat, yet margin warnings and withdrawn 2026 guidance pressured sentiment. As hyperscalers reassessed spending, semiconductor stocks weakened, affecting broader risk appetite.
Finally, the Bank of Japan added uncertainty by preparing a rate hike to 0.75% and ETF unwinds. Wintermute noted Bitcoin’s sensitivity to yen carry trade shifts during similar events in 2024 and January 2025. However, U.S. selling flows remained the primary driver, while European flows stayed neutral and Asia showed limited conviction.
