The recent wave of hedge fund selling of BTC may be approaching its end. Over the past few weeks, funding rates and benchmark rates have both declined, while CME BTC open interest has significantly decreased. Market selling pressure has now been largely exhausted, and BTC is in a consolidation phase.
The Federal Reserve Becomes a Key Factor in BTC's Direction
BTC's topping process began with stronger-than-expected US employment data in early December 2024, which initially weakened Altcoins' momentum. BTC then reached its peak during the hawkish FOMC meeting in mid-December. Although BTC attempted to rebound before Trump's inauguration, the recent collapse of the Trump MEME coin led to the beginning of a MEME coin market retreat. This series of events caused tops in Altcoins, BTC, and MEME coins, driving BTC into its current consolidation phase. The Federal Reserve has now become the key factor in determining whether BTC will break out of this range or face a deeper adjustment.
While this week's Federal Reserve meeting may not be dovish enough to drive a significant rebound in BTC and Altcoins, it does mark a slight shift. Chairman Powell stated that the Fed will "ignore" the recent rise in inflation expectations and does not believe Trump's tariffs will lead to sustained high inflation.The Federal Reserve will adopt a wait-and-see attitude rather than responding to these inflationary pressures through rate hikes. Although growth expectations have been downgraded, the Fed will tolerate temporary inflation risks. Combined with the slowdown in quantitative tightening, the tone of this meeting can be interpreted as moderately dovish.
BTC Whales Become the Dominant Group, BTC's Structural Resilience Increases
Since Trump's election in November 2024, a clear trend has emerged:Wallets holding 100 to 1,000 BTC (worth approximately $8 million to $80 million) have become the dominant group.This may reflect long-term BTC accumulation by family offices and wealth management institutions, especially with increased regulatory clarity. This structural shift is one of the key reasons we no longer expect the extreme 70-80% drawdowns seen in previous BTC cycles.
Over the past three weeks, Bitcoin's price has remained below its 21-week moving average.Combining the 21-week moving average and short-term holder indicators, $90,000 can be viewed as a critical turning point that may determine whether BTC remains in a bull or bear market.
Disclaimer: Markets are risky, and investment requires caution. This article does not constitute investment advice. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
