Bitcoin Dips Under $90K: Fed Jitters & Thin Liquidity Pressure Crypto Markets

Bitcoin's price action stumbles as it breaks below a key psychological threshold.

The Fed Factor: A Persistent Headwind

Market uncertainty swirls around the Federal Reserve's next move, creating a classic risk-off environment that weighs on digital asset valuations. Traders are parsing every data point and Fed speaker comment, looking for clues—and finding mostly noise.

Liquidity Evaporates When You Need It Most

Analysts point to weakening market depth as a core issue. Order books are looking thin, meaning even modest selling pressure can trigger outsized price moves. It's the financial equivalent of a shallow pool—easy to make a big splash.

This combination of macro uncertainty and poor market structure creates a challenging short-term setup. Yet, for long-term believers, these dips have historically been opportunities in disguise—moments where weak hands transfer assets to strong ones. The narrative hasn't changed, only the price tag. Remember, on Wall Street, 'uncertainty' is often just a fancy word for 'we have no idea either.'

High Interest Rates Keep Institutional Capital Cautious on Bitcoin

As interest rates stay elevated, the cost of capital continues to weigh on speculative assets. Tran noted that Bitcoin tends to respond to forward-looking liquidity expectations, meaning that without clear conviction around a sustained easing cycle, institutional capital is likely to remain selective or sidelined.

“As long as the market lacks clear conviction that the Fed will deliver a decisive rate-cutting cycle, large capital flows tend to remain on the sidelines or participate only cautiously and selectively,” she added.

Strength in the US dollar and rising Treasury yields have added further pressure. The dollar index has climbed for several sessions, while the 10-year US Treasury yield has pushed toward a three-month high near 4.17%.

$BTC: Price is trading above the lower boundary of the Gaussian channel. To maintain a bullish outlook, weekly closes should remain above this level. pic.twitter.com/mJnwqtShQ0

Higher real yields typically diminish the appeal of non-yielding assets such as Bitcoin, particularly for institutions operating under strict allocation frameworks.

The growing role of spot Bitcoin exchange-traded funds has also reshaped market dynamics. While ETFs have broadened access and deepened institutional participation, they have also tied Bitcoin more closely to traditional capital flows.

“From a long-term perspective, the growing involvement of major financial institutions – from asset managers to banks – continues to reinforce Bitcoin’s position as an increasingly institutionalized asset, distinctly different from previous cycles,” Tran said.

Sit quietly and think deeply for a moment about what printing up to $20T by the end of ‘27 does to the price of Bitcoin.pic.twitter.com/2avQkfQhVu

Low Exchange Reserves Signal Holder Confidence

On-chain indicators suggest that long-term holders remain active, with exchange reserves staying relatively low.

Last week, K33 also said Bitcoin’s prolonged sell-side pressure from long-term holders may be approaching its limits after years of steady distribution.

However, Tran cautioned that this does not guarantee near-term upside. Some long-term holders have taken profits after the previous rally, while others continue to treat Bitcoin as a strategic allocation.

She concluded that Bitcoin’s next decisive MOVE will likely depend on clearer signals of monetary easing and a more supportive liquidity environment.

“In my view, the market is more likely to continue oscillating within a wide range and attempt to re-accumulate while waiting for new catalysts, either from a renewed pickup in institutional inflows or from a more constructive macroeconomic outlook,” she said.

As reported, gold has jumped to a fresh record of $4,383.73 an ounce, supported by rate cut expectations, SAFE haven demand, and a softer dollar.

Silver also pushed to a record, extending a powerful rally that has turned the metal into one of 2025’s standout trades.