Can we expect Bitcoin to recover from its stalled rally in the future?
Why Bitcoin’s $94K Rally Stalls Despite Fed Policy Changes: Key Insights Revealed
Bitcoin’s surge toward the $94K zone has cooled, puzzling traders who expected easier Federal Reserve policy to fuel a clean breakout. The pause isn’t about a single headline. It’s a confluence of macro liquidity, crypto market structure, and on-chain supply dynamics that together create resistance just below psychologically important round numbers like $95K and $100K.
Macro backdrop: Fed “easing” isn’t the same as net liquidity
The market often equates a dovish Fed with immediate risk-asset upside. In practice, the liquidity that matters for BTC is shaped by multiple channels-not just the policy rate.
| Policy lever | What changed | Crypto-relevant channel |
|---|---|---|
| Rates guidance | Shift from hikes to an easing bias; gradual or tentative cuts | Lowers discount rates over time, but often pre-priced by markets |
| Balance sheet (QT) | QT continues or only tapers slowly | Drains dollar liquidity that supports risk assets and stablecoin growth |
| Treasury issuance | Heavy coupon supply persists | Absorbs liquidity; can offset rate cuts |
| Real yields & dollar (DXY) | Sticky real yields; firm USD | Headwind for BTC-denominated risk taking |
Key takeaway: Even with friendlier Fed signals, net dollar liquidity can remain tight when QT and heavy Treasury supply continue, while higher real yields and a resilient USD limit multiple expansion across risk assets-including BTC.
Market structure: ETFs, derivatives, and the $95K-$100K gamma wall
Spot Bitcoin ETF flows have normalized
- After blockbuster launches and sustained inflows in 2024, US spot ETF flows have become choppier in 2025, with days of net outflows punctuating otherwise healthy demand.
- Flows remain a primary marginal buyer, but the pace has slowed compared with the initial discovery phase. When inflows decelerate, BTC tends to consolidate rather than trend.
- Rotation into higher-beta crypto assets during risk-on windows can also siphon marginal bids away from BTC near resistance.
Derivatives positioning is capping upside
- Options open interest is concentrated around round-number strikes (95K, 100K), creating gamma “walls” that encourage mean-reversion into expiries.
- High perpetual funding and basis premia signal crowded longs; market makers hedge aggressively, dampening breakouts unless new spot demand arrives.
- Quarterly and monthly expirations often “pin” price into strike clusters, followed by direction only after OI clears or rolls.
On-chain supply: miners and long-term holders are feeding the rally
- Post-halving miner economics: With reduced block rewards, many miners periodically sell into strength to cover opex and capex, adding supply near resistance.
- Long-term holder distribution: Older coins historically move on new all-time highs; as unrealized profits rise, long-term holders sell a fraction, creating overhead supply.
- Heat-check indicators: Rising MVRV and sustained SOPR > 1 typically align with profit-taking regimes; they don’t imply a bear market, but they do argue for digestion.
- Exchange reserves: When coins trickle back to exchanges during rallies, it often telegraphs more two-way flow and thinner upside follow-through.
Global liquidity and FX: the quiet forces
- Dollar strength: A firm DXY often coincides with shallower crypto rallies; non-US buyers face higher local-currency costs, tempering demand.
- Japan and Europe: Policy normalization outside the US (e.g., BoJ tweaks, ECB data-dependence) can repatriate capital or shift global rates, affecting USD funding and risk appetites.
- Stablecoin supply as a proxy: Rapid stablecoin growth has historically aligned with crypto uptrends; when growth decelerates, it signals less “dry powder.”
| Near-term headwinds | Potential tailwinds |
|---|---|
| Sticky real yields, firm USD | Clear downtrend in real yields/DXY |
| Gamma walls at 95K-100K | OI rolls/clears after major expiry |
| ETF inflow slowdown | Re-acceleration of net ETF inflows |
| Miner and LTH distribution | Re-accumulation and exchange outflows |
What could unlock a decisive breakout above $100K?
- Spot demand impulse
- Re-acceleration in US spot ETF net inflows and deeper integrations (retirement platforms, model portfolios).
- New jurisdictional approvals or improved liquidity in existing non-US spot products.
- Macro lubrication
- Visible easing of financial conditions: lower real yields, weaker DXY, and/or a clearer QT taper.
- Reduced Treasury coupon supply or improved liquidity absorption by money markets.
- Derivatives reset
- Lower perp funding and term basis after a shakeout, reducing the cost of maintaining longs.
- Options OI redistribution away from 95K-100K, removing the gamma pin.
- On-chain confirmation
- Exchange balances trending down, LTHs re-accumulating, and miner selling moderating.
- Sustainable network activity growth (fees, active addresses, L2 usage) without froth.
Conclusion
Bitcoin stalling near $94K despite friendlier Fed policy is not paradoxical-it’s a classic late-stage impulse pause. Policy signaling alone doesn’t guarantee net liquidity; ETF demand ebbs and flows; derivatives positioning can cap upside; and on-chain sellers opportunistically feed strength. For a clean move through $100K, watch for a synchronized setup: softer real yields and USD, renewed spot inflows, a derivatives reset, and evidence that miners and long-term holders are back in accumulation mode. Until then, expect choppy ranges as the market digests gains and builds the next base for the cycle’s advance.
