Bitcoin stalls at $90,000 as 'perfect' inflation report hid massive data error

US inflation has slowed more than expected, and the Federal Reserve has cut interest rates for the third time in a row. The Bank of Japan raised interest rates for the first time in 30 years without causing a meltdown.

On paper, the macro tape heading into the end of the year looks friendlier than it has been in recent months.

At the time of writing, Bitcoin (BTC) is up 4% since December 18th, briefly touching $90,000 again on December 22nd, only to stall. There's no parabolic leg, just a short spike followed by the same choppy stretch that characterized the fourth quarter.

The discrepancy between a softer macro environment and Bitcoin's slower response begs the question: If lower interest rates and cooling inflation aren't enough to cause a rally, what's slowing the tape?

The answer lies in the details, including tainted data, still-limited real yields, and the structural weaknesses of Bitcoin itself.

good news with asterisk

November's CPI hit the headlines everyone was hoping for. YoY 2.7% vs. Estimate 3.1%, Core was 2.6% vs. Consensus 3.0%. This is the lowest core measure since 2021, with headline inflation clearly settled within the 2%-3% range for the first time.

But all serious macronotes point to the same problem. Due to the six-week government shutdown, October's CPI was not published, and most of November's prices were estimated rather than observed.

Rent prices and some services relied on modeled data rather than actual market readings. Reports have warned against treating this as a clean change of government.

Federal Reserve President John Williams weighed in on that skepticism. In an interview and speech on Dec. 19, he called the CPI statistics “reassuring,” but made it clear that both inflation and unemployment data remain skewed by gaps related to the government shutdown.

He said there was “no immediate need” for further cuts and that the policy was “balanced.”
It's the opposite of a green light. Interest rates have been falling, but the Fed has indicated that this particular good news is a rant and not a trigger for aggressive easing.

In the case of Bitcoin, it is unlikely that traders will pre-empt a massive liquidity wave from a single tainted report. The market is waiting for January's results to clear up before deciding whether November was a temporary dip or a full-blown downturn.

Real yields still not like they were in 2020-21

Even after three interest rate cuts and moderate inflation, macroeconomic plumbing remains tight. As of Dec. 22, the 10-year TIPS yield was about 1.9%, while the Treasury's long-term real interest rate averages in the 1.5% to 2% range.

This is much higher than negative real interest rates in 2020 and 2021, leaving discount rates for long-term risk assets high.

The Fed ended quantitative tightening on December 1st, but that does not mean quantitative easing (QE) has resumed. The note confirms that Treasury and MBS outflows have stopped, with the next step described as “reserve management” through limited purchases rather than a surge in balance sheets.

According to the Dec. 18 H.4.1 release, the Fed's total assets are about $6.56 trillion, down about $350 billion over the past year.

Williams stressed that the new asset purchases are “technical” and “not quantitative easing” and are aimed at maintaining order in money markets rather than orchestrating a collapse in risky assets.

Although the direction has shifted from tightening to easing, real yields remain positive and the Fed is not pumping new dollars into the system.

Bank of Japan rate hike: anchor out but chain still loose

The Bank of Japan's move to 0.75% was widely reported, with Governor Kazuo Ueda criticizing the delay in normalization. According to reports, this is the highest policy rate in Japan in 30 years, and the yield on 10-year government bonds is at its highest level in 26 years.

Macro desks have already written up their view on yen carry, calling the latest rate hike “structurally important” and pointing out that if markets start pricing in further rate hikes, it could trigger an unwinding of the carry trade and force de-risking across global assets, including Bitcoin.

Now, with Mr. Ueda's emphasis on gradualism, the yen is actually depreciating again. This gives traders some breathing room, but leaves potential stress on the system. The Bank of Japan has removed the zero interest rate anchor, but has not yet pulled the chain.

Traders know that a genuine carry squeeze can cause drawdowns of 20% to 30% and are reluctant to leverage up just because the initial rally lands without fireworks.

Bitcoin's liquidity is running out

The macro condition explains part of the muted response, but the rest is explained by Bitcoin's internal structure.
Glassnode's Week 50 note explains that BTC is range-bound as there is a large amount of underwater supply between approximately $93,000 and $120,000, with demand waning and loss realization increasing each time the price spikes.

Bitcoin's total market depth of 2% is down about 30% from its peak in 2025, dropping from about $766 million in early October to about $569 million by early December, just as ETF outflows hit $3.5 billion in November.

Additionally, purchase liquidity has been “drained” and coins are mostly circulating among existing players rather than being absorbed into new capital.

October's rise to $126,000 was pre-priced with a lot of “good news”. What remains is a market with thinning depths, choppy ETF flows, and thick bands of underwater supply above the spots.

What this means for 2026

Macro tape is no longer hostile, but neither is it the clear balance sheet-driven boom that made 2020-2021 seem inevitable.

Normally, moderate inflation and three Fed rate cuts would be rocket fuel, but this time the CPI data has been distorted, the Fed has signaled “no need to rush,” and real yields have remained positive. The transition from QT to neutral policy has not yet resulted in a true liquidity wave.

The Bank of Japan's 30-year high interest rate hike removed the psychological zero-rate anchor that was driving global carry trades, leaving them with an overhang above all leveraged risk trades.

Inside crypto, the market is waiting for either a clean macro break or truly new liquidity, rather than just a “good” headline.

Bitcoin is behaving like a middling macro asset, reacting to conditions but not exploding. The expected economic boom has not materialized due to the gap between weak data and the still harsh reality.