Bitcoin traded in the $80,000 range on Dec. 31, as U.S. inflation subsided and investors priced in a Federal Reserve interest rate cut.
The lack of follow-through has led traders to focus less on macro headlines and more on a combination of real yields, money market plumbing, and spot ETF flows. This shift keeps price trends locked in at established levels, even when “a rate cut is coming” dominates the narrative.
Macro without a boom: Why “good news” doesn’t move Bitcoin
The latest inflation data confirmed that theory on paper.
Composite CPI rose 2.7% year-on-year in November, and core CPI rose 2.6%.
However, this print also came with credibility issues, making it easier for the market to treat this release as confirmation rather than new information.
Data disruptions due to the government shutdown impacted collection and timing. This includes the cancellation of the October Consumer Price Index and the postponement of November collections during the holiday discount period.
The policy is also not a clean risk-on impulse, but a mixed reinforcement.
The target range for federal funds is 3.50% to 3.75% after the third rate cut in 2025.
The Fed said in its December economic forecast summary that there was a median rate cut of one in 2026, with wide variation.
CME Group's FedWatch remains the standard reference point for traders who want to know the market's current odds rather than the Fed's predictions.
The gap between implicit probabilities and policymakers' centers of gravity is part of the reason why “cuts” alone aren't enough to lift Bitcoin out of its range.
This constraint is manifested in the most important discount rate for duration assets: the real yield.
The real yield on 10-year TIPS was around 1.90% as of late December.
If real yields are maintained around that level, nominal policy easing and real monetary tightening may coexist. This could limit the upside that traders tend to expect from a rate cut.
In other words, while the market celebrates the “rate cut,” Bitcoin can wait out a combination that is likely to become more important: lower real yields and an impulse of clean liquidity to reach marginal buyers.
Why interest rate cuts weren't enough to unlock new heights for Bitcoin
The liquidity situation also does not appear to be as simple as the easing narrative suggests, especially towards the end of the year.
Utilization of the New York Fed's standing repo facility reached an all-time high of $74.6 billion on Dec. 31, and reverse repo balances also increased at the end of the year.
This combination can also be interpreted as “liquidity is available” without being interpreted as “liquidity is easy.” This distinction is important for leveraged risk positioning.
The Fed's policy rate is not the only mechanism behind this type of stress. They also reflect cash movements such as balance sheet capacity and changes in the Treasury General Account, which the Federal Reserve has outlined as a channel through which reserves can be drained or added to, regardless of the primary policy stance.
The Fed's balance sheet levels, tracked weekly through FRED's WALCL, remain a reference point for investors seeking confirmation that liquidity is loosening in a way that supports continued risk-taking.
At the same time, Bitcoin price movements are more consistent with a flow and positioning regime than following headlines.
Glassnode described a zone defined as rejection around $93,000 and support around $81,000. According to Glassnode Insights, this framework suggests a range-driven market as overhead supply is absorbed.
Reuters also noted that Bitcoin has been trading in the low $80,000 range through late December, well below its October peak. This reinforced the idea that macro optimism does not lead to immediate upside.
How ETF-driven flows reshaped Bitcoin price reaction to macro news
The post-ETF market structure helps explain why the reaction function has changed.
The Spot Bitcoin ETF has inserted a large visible flow channel between macro sentiment and spot buying pressure. This channel can weaken the impact of “good news” when demand is weak or net selling is dominant.
Since November 4th, there have been approximately $3.4 billion in net outflows from U.S. spot Bitcoin ETFs, with IBIT leading the way.
The underlying daily series is tracked by far-side investors. Daily patterns are important because a series of positive developments can provide stable spot demand even in turbulent macro conditions, while a series of red days can dampen gains that would have been greater in the pre-ETF market.
| driver | Latest reference point | Why is it important for BTC? |
|---|---|---|
| inflation | November CPI 2.7% YoY, Core 2.6% YoY (BLS) | Supports 'cut' narrative, but quality warnings may limit re-pricing (Reuters) |
| real yield | 10 Year TIPS Real Yield ~1.90% (FRED DFII10) | Keep the discount rate limited even if a nominal discount price is set |
| fluid piping | SRF usage record on December 31st was $74.6 billion (Reuters) | Signals of localized tightness that could constrain leverage and risk appetite |
| ETF flow | Since November 4th, net outflows have been approximately $3.4 billion (ETF Database, Pharcyde) | Weakening marginal bids that often cause breakouts |
| market structure | Support ~$81,000, Resistance ~$93,000 (glass node) | Set up short-term “battlefields” where catalysts require follow-through |
This setup allows traders to monitor macro easing to see if it is translating into the specific input that Bitcoin is reacting to.
What needs to change for Bitcoin to break out of the macro range
One path is a base case in which rate cuts are still priced in, inflation is undisputed, and real yields remain solid. If that happens, Bitcoin could remain within the $81,000 to $93,000 zone flagged by Glassnode.
Another path requires investors to keep going back to the checklist. These include a downward trend in 10-year real yields, sustained turnover in daily spot ETF composition, and a clean run with indirect supply near the upper end of the range.
For investors planning broader cross-market deployments into early 2026, the dollar remains part of the backdrop rather than the sole catalyst.
The US dollar started 2026 on a weak note after posting its biggest annual decline in eight years.
In previous cycles, a weak dollar has been a typical tailwind. This time, it wasn't enough to overcome the combined resistance of rising real yields and ETF outflows.
In that sense, Bitcoin is behaving less like a pure reaction to “good news” and more like an asset awaiting measurable transmission through interest rates, funding markets, and ETF flow channels that sit between macro and spot demand.
