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BTC Trades Sideways Amid Thin Liquidity and Fed Outlook
Bitcoin steadied around the $86,600 level following a volatile trading session marked by sharp intraday price movements. After briefly surging toward $90,000 early Wednesday, the cryptocurrency quickly reversed course, dipping below $86,000 before stabilizing.
According to market data, bitcoin was trading at $86,670, up 0.061% over the past 24 hours, as of early Thursday morning Eastern Time. The rapid price fluctuations reflected fragile market conditions rather than a decisive directional shift.
Thin Liquidity and Macro Uncertainty Drive Volatility
Market analysts attributed the heightened volatility to thin liquidity and ongoing macroeconomic uncertainty, factors that have weighed on trader confidence in recent weeks.
“The recent volatility in Bitcoin stems primarily from broader risk-off sentiment in global markets, reduced ETF inflows, deleveraging in derivatives, and increased correlation with equities amid uncertainty over monetary policy and macroeconomic pressures,” said Nick Ruck, Research Director at LVRG Research.
Ruck added that bitcoin’s current positioning appears consistent with year-end portfolio adjustments, alongside fading expectations of a seasonal rally typically seen in late December.
Market Repricing, Not Seasonal Weakness
Vincent Liu, Chief Investment Officer at Kronos Research, echoed similar observations, suggesting that the current price range reflects structural repositioning rather than seasonal trends.
“BTC sitting around $85k to $86k feels less like seasonality and more like re-pricing,” Liu said. “After a strong run, flows have cooled, leverage has reset, and the market is waiting for a real catalyst.”
Liu noted that while downside risks exist, current conditions do not yet resemble a prolonged downturn.
“It’s a time-driven grind under heavy overhead supply, with leverage already flushed and price holding above the True Market Mean around $81k,” he said.
Federal Reserve Outlook Adds Another Layer of Uncertainty
Broader macro concerns remain in focus as markets look toward 2026. After delivering rate cuts in three consecutive meetings, Federal Reserve Chair Jerome Powell signaled that further easing may pause in January.
Probability data from futures and prediction markets currently suggest a strong likelihood that rates will remain unchanged next month. However, expectations could shift following a leadership change at the Fed.
U.S. President Donald Trump stated that the next Federal Reserve chair would favor significantly lower interest rates.
“I’ll soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates by a lot,” Trump said.
Reports indicate that Christopher Waller, Kevin Warsh, and Kevin Hassett are among the leading candidates under consideration.
