Bitcoin (BTC) is approaching the $90,000 mark as US inflation data showed a larger-than-expected decrease, with the November CPI reported at 2.7% year-over-year, compared to the anticipated 3.1%. This lower figure narrows the distance to the Federal Reserve’s 2% target, alleviating near-term inflation pressures and boosting market risk appetite.
Key takeaways:
The surprising CPI data elicited a favorable response from Bitcoin, leading to new positions being established rather than the typical short covering.
On-chain data indicates a “balance-sheet” recovery and loss absorption for BTC, rather than capitulation.
CPI report drives BTC price as positions are rebuilt near $90,000
Crypto trader Back notes that Bitcoin’s surge following the CPI has seen a rise in open interest, suggesting fresh positioning rather than just a squeeze of short sellers. Options gamma exposure remains relatively stable around the current price, indicating that Bitcoin can move more freely if liquidity expands.
Nonetheless, the rally is perceived as impulsive rather than the start of a new trend. The early gains appear liquidity-driven, which suggests potential for short-term pullbacks as traders reassess their positions following the initial spike.
The last major macroeconomic event of the year is the Bank of Japan’s (BOJ) interest rate decision scheduled for December 19. Although BOJ policy changes can impact global liquidity through yen funding markets, recent market behavior indicates that much of this risk may already be priced into Bitcoin’s sideways movement in recent sessions. A non-disruptive outcome could eliminate one of the final sources of near-term uncertainty for BTC.
Related: Bitcoin’s volatility dips below Nvidia in 2025 as investor base expands: Bitwise
BTC on-chain data suggests stabilization, not distribution
According to data from CryptoQuant, Bitcoin is moving into a repair phase since October. Exchange metrics like net-unrealized profit/loss (NUPL) show that unrealized losses have stabilized, while the spent-output profit ratio (SOPR) near breakeven indicates that coins are sold close to their acquisition cost rather than in a panic.
Depository activity on major exchanges typically spikes during brief downturns and diminishes as prices stabilize, supporting the view that the selling pressure is reactive rather than structural. Meanwhile, the inflow of highly active addresses remains high, but MVRV has plateaued, indicating trading within a range instead of renewed speculative fervor.
However, the latest inflation figures could create a more favorable environment. Should dollar pressure lessen and real yields decline in the coming days, Bitcoin’s current stabilization could shift into a more sustained upward movement, particularly if it reclaims $90,000.
From a technical perspective, BTC needs to surpass $90,000 and regain a position above the monthly VWAP (volume-weighted average price) to demonstrate buyers’ conviction. A daily close above that level would be crucial, with immediate sell-side liquidity available within the fair value gap (FVG) of $90,500 to $92,000.
A failure to break through and an increase in short positioning could see BTC test swing lows around $83,800.
Related: Bitcoin seeks liquidity as US CPI inflation dips to the lowest level since 2021
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
