Bitcoin Rebounds Above $90K as Fed Policy Shifts Spark Potential Bull Signals

Bitcoin rebounded above $90,000 after dipping to $88,000 on Monday, fueled by the Federal Reserve’s end to quantitative tightening and anticipated 25 basis point rate cut following the FOMC meeting. This policy shift enhances appeal of risk-on assets like Bitcoin, potentially driving increased capital inflows to the crypto market.

Bitcoin price recovery – Surge past $90,000 signals renewed investor confidence amid favorable monetary policy changes.
Dovish Federal Reserve stance boosts risk assets, encouraging capital rotation into cryptocurrencies for higher yields.
On-chain indicators like the Bitcoin Futures Market Power at 56.5 and positive Coinbase Premium Index reflect growing spot demand from U.S. investors, with data from CryptoQuant showing sustained positive trends since late November.

Discover why Bitcoin rebounded above $90k amid Fed policy shifts. Explore on-chain metrics signaling bullish momentum and potential for new highs. Stay informed on crypto market trends—subscribe for daily updates.

What Caused Bitcoin’s Rebound Above $90,000?

Bitcoin’s rebound above $90,000 was primarily triggered by the Federal Reserve’s decision to conclude quantitative tightening and market expectations of a 25 basis point interest rate cut at the upcoming FOMC meeting. These developments create a more accommodative monetary environment, making high-growth assets like Bitcoin more attractive to investors seeking better returns. As a result, Bitcoin quickly recovered from its Monday low of $88,000, demonstrating resilience in the face of short-term volatility.

The broader context involves shifting investor sentiment toward risk-on investments. With traditional safe-haven assets offering lower yields in a loosening policy landscape, capital has begun flowing into digital assets. This rotation is evident in increased trading volumes and positive price action across major cryptocurrencies, positioning Bitcoin as the frontrunner in this trend.

Do On-Chain Metrics Indicate a Local Market Bottom for Bitcoin?

On-chain metrics provide deeper insights into Bitcoin’s current market dynamics, offering a data-driven perspective on whether the recent dip to $88,000 marked a local bottom. According to analysis from crypto expert Axel Adler, the Bitcoin Futures Market Power indicator has activated a bullish signal, currently standing at 56.5. This composite metric integrates open interest, funding rates, and taker imbalance to gauge derivative market pressure.

A value above 50 suggests building bullish momentum, with a potential breakthrough above 60 confirming stronger upward trends. Conversely, a decline below 50 could indicate bearish shifts and risk further corrections. Adler’s assessment, based on real-time derivatives data, underscores the metric’s reliability in predicting short-term price directions.

Source: Axel Adler

Complementing this, the Coinbase Premium Index has maintained a positive trajectory since November 28, highlighting robust spot demand from U.S.-based investors. This index measures the price premium of Bitcoin on Coinbase compared to Binance, often serving as a proxy for American institutional interest. Data from CryptoQuant indicates the index’s persistence above zero, which correlates with periods of price appreciation and reduced selling pressure.

Historically, positive readings in this index have preceded rallies of 10-20% within weeks, as U.S. buyers accumulate during perceived dips. This trend aligns with broader market recovery, where institutional inflows via spot ETFs have stabilized Bitcoin’s floor price.

Source: CryptoQuant

Another key indicator, Coin Days Destroyed, monitors the activity of long-term holders by tracking the age of spent coins. Recent data shows minimal spikes over the past ten days, suggesting holders are not aggressively profit-taking or distributing supply. Spikes in this metric often precede tops or bottoms, as they reflect significant movement from dormant wallets.

CryptoQuant reports indicate that quiet periods like this one support accumulation phases, where patient investors build positions without disrupting price stability. For context, during the 2021 bull run, similar low activity levels preceded a 50% surge. Traders should watch for any upticks, as they could signal a local top if combined with overbought conditions.

Source: CryptoQuant

Additionally, recent market analysis reveals that approximately 25% of Bitcoin’s supply has entered unrealized loss territory, primarily held by buyers from the past few months at higher averages. Breaking above $106,200 would require a structural shift, potentially realigning these holders to profitable positions and unlocking further upside. This underwater supply acts as a resistance level but also highlights the opportunity for recovery as macroeconomic tailwinds strengthen.

Frequently Asked Questions

What Factors Are Driving Bitcoin’s Current Price Recovery?

The primary drivers include the Federal Reserve’s pivot away from quantitative tightening and expectations of a 25 basis point rate cut post-FOMC. These policies lower borrowing costs, encouraging investment in high-return assets like Bitcoin. On-chain data from sources like CryptoQuant further supports this, showing increased U.S. spot demand and bullish derivatives signals, which have propelled prices back above $90,000 in under 48 hours.

Will the Federal Reserve’s Rate Cut Lead to New All-Time Highs for Bitcoin?

A rate cut could indeed catalyze new highs for Bitcoin by boosting liquidity and risk appetite, as seen in past cycles where easing policies correlated with 30-50% gains. However, sustained momentum depends on on-chain confirmations like sustained positive Coinbase Premium and low Coin Days Destroyed activity. Investors should monitor FOMC outcomes for clearer directional cues, potentially pushing Bitcoin toward $100,000 if global adoption accelerates.

Key Takeaways

Bullish On-Chain Signals: The Bitcoin Futures Market Power at 56.5 and positive Coinbase Premium Index indicate strengthening demand, particularly from U.S. institutions, supporting the rebound above $90,000.
Monetary Policy Influence: End of quantitative tightening and impending rate cuts create favorable conditions for risk assets, with historical data showing crypto inflows during such periods.
Holder Behavior Monitoring: Low Coin Days Destroyed suggests long-term holders are accumulating, but watch for spikes that could signal profit-taking; aim for a break above $106,200 to resolve unrealized losses for 25% of supply.

Conclusion

Bitcoin’s rebound above $90,000 underscores the interplay between macroeconomic policy shifts and on-chain metrics, with the Federal Reserve’s dovish stance enhancing Bitcoin price recovery prospects. Indicators like the Coinbase Premium Index and Coin Days Destroyed point to sustained demand and holder patience, though underwater supply poses near-term challenges. As markets await FOMC clarity, investors may see accelerated capital flows, potentially setting the stage for Bitcoin to challenge previous highs—position yourself strategically for the evolving crypto landscape.

Source: https://en.coinotag.com/bitcoin-rebounds-above-90k-as-fed-policy-shifts-spark-potential-bull-signals

Highlights: US prosecutors requested a 12-year prison sentence for Do Kwon after the Terra collapse. Terraform’s $40 billion downfall caused huge losses and sparked a long downturn in crypto markets. Do Kwon will face sentencing on December 11 and must give up $19 million in earnings. US prosecutors have asked a judge to give Do Kwon, Terraform Labs co-founder, a 12-year prison sentence for his role in the remarkable $40 billion collapse of the Terra and Luna tokens. The request also seeks to finalize taking away Kwon’s criminal earnings. The court filing came in New York’s Southern District on Thursday. This is about four months after Kwon admitted guilt on two charges: wire fraud and conspiracy to defraud. Prosecutors said Kwon caused more losses than Samuel Bankman-Fried, Alexander Mashinsky, and Karl Sebastian Greenwood combined. U.S. prosecutors have asked a New York federal judge to sentence Terraform Labs co-founder Do Kwon to 12 years in prison, calling his role in the 2022 TerraUSD collapse a “colossal” fraud that triggered broader crypto-market failures, including the downfall of FTX. Sentencing is… — Wu Blockchain (@WuBlockchain) December 5, 2025 Terraform Collapse Shakes Crypto Market Authorities explained that Terraform’s collapse affected the entire crypto market. They said it helped trigger what is now called the ‘Crypto Winter.’ The filing stressed that Kwon’s conduct harmed many investors and the broader crypto world. On Thursday, prosecutors said Kwon must give up just over $19 million. They added that they will not ask for any additional restitution. They said: “The cost and time associated with calculating each investor-victim’s loss, determining whether the victim has already been compensated through the pending bankruptcy, and then paying out a percentage of the victim’s losses, will delay payment and diminish the amount of money ultimately paid to victims.” Authorities will sentence Do Kwon on December 11. They charged him in March 2023 with multiple crimes, including securities fraud, market manipulation, money laundering, and wire fraud. All connections are tied to his role at Terraform. After Terra fell in 2022, authorities lost track of Kwon until they arrested him in Montenegro on unrelated charges and sent him to the U.S. Do Kwon’s Legal Case and Sentencing In April last year, a jury ruled that both Terraform and Kwon committed civil fraud. They found the company and its co-founder misled investors about how the business operated and its finances. Jay Clayton, U.S. Attorney for the Southern District of New York, submitted the sentencing request in November. TERRA STATEMENT: “We are very disappointed with the verdict, which we do not believe is supported by the evidence. We continue to maintain that the SEC does not have the legal authority to bring this case at all, and we are carefully weighing our options and next steps.” — Zack Guzmán (@zGuz) April 5, 2024 The news of Kwon’s sentencing caused Terraform’s token, LUNA, to jump over 40% in one day, from $0.07 to $0.10. Still, this rise remains small compared to its all-time high of more than $19, which the ecosystem reached before collapsing in May 2022. In a November court filing, Do Kwon’s lawyers asked for a maximum five-year sentence. They argued for a shorter term partly because he could face up to 40 years in prison in South Korea, where prosecutors are also pursuing a case against him. The legal team added that even if Kwon serves time in the U.S., he would not be released freely. He would be moved from prison to an immigration detention center and then sent to Seoul to face pretrial detention for his South Korea charges. eToro Platform Best Crypto Exchange Over 90 top cryptos to trade Regulated by top-tier entities User-friendly trading app 30+ million users 9.9 Visit eToro eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.