Bitcoin Hovers Below $90,000 as Fed Cut Expectations Lift Risk Appetite

Key Moments

Bitcoin Holds Near $89,000 After Weekly Pullback

Bitcoin edged higher on Monday, stabilizing just under the $90,000 threshold after a negative week for the token. The world’s largest cryptocurrency last changed hands at $89,089.92 by 02:25 ET (07:25 GMT), recovering modestly after losing 2% over the previous week.

Despite the slight rebound, trading activity stayed subdued, with Bitcoin moving within a narrow band amid thin liquidity. The lack of conviction has kept price action relatively constrained even as broader risk assets showed signs of strength.

📊 MARKETS UPDATE:

Bitcoin is moving from deep undervaluation toward equilibrium.

This phase historically appears after capitulation, when weak hands exit and stronger capital steps in.

Not a top signal.
A reset.

That’s where sustainable trends are built. pic.twitter.com/OjOOc6cQbH

— Crypto Tice (@CryptoTice_) December 22, 2025

Key Drivers: Fed Expectations and Year-End Caution

Broader market sentiment improved as investors increasingly priced in interest rate cuts by the Federal Reserve in 2026. A softer-than-expected inflation reading supported views that monetary policy could eventually turn more accommodative, bolstering demand for risk-sensitive assets.

However, Bitcoin has struggled to build a sustained uptrend. The token has repeatedly failed to convincingly clear the psychologically important $90,000 level. Traders attributed the hesitation to waning demand from institutional products and a generally cautious stance ahead of the year-end holiday period, which has also contributed to reduced liquidity.

Global Markets: Risk Assets Gain, Gold Hits Record

While Bitcoin remained rangebound, other asset classes reflected stronger risk appetite. Gold prices climbed to new all-time highs on Monday, supported by robust demand as markets responded to the prospect of future Fed rate cuts following the softer inflation data.

Equity markets also strengthened. Global stocks advanced, with Asian indices opening higher alongside gains in U.S. futures, as investors positioned for improved liquidity conditions and the possibility of a year-end equity rally.

ETF Flows and Sentiment Keep Crypto in a Range

Analysts highlighted slowing inflows into exchange-traded funds and mixed sentiment across the digital asset space as key reasons why cryptocurrencies, including Bitcoin, have remained stuck in defined ranges. This combination of muted institutional participation and uneven retail interest has limited the potential for a decisive breakout.

Hong Kong Insurers Weigh Crypto Exposure Under New Proposal

Regulatory developments in Hong Kong added another focal point for crypto investors. According to a report from Bloomberg News, the city’s insurance regulator is considering new guidelines that would permit insurers to allocate capital to assets such as cryptocurrencies and infrastructure. The initiative aims to encourage investment into areas considered priorities by the government.

The report stated that, under the proposal, the Insurance Authority would apply a 100% risk charge to crypto holdings. For stablecoins, risk charges would depend on the fiat currency to which the tokens are pegged, as outlined in a Dec. 4 presentation viewed by Bloomberg.

Altcoin Market: Mostly Rangebound With Select Moves

Price action across major altcoins was similarly subdued on Monday, with most tokens also trading within established ranges.

Ethereum, the second-largest cryptocurrency by market capitalization, climbed 1.7% to $3,032.92. XRP, the world’s third-largest crypto asset, was little changed at $1.92. Solana and Cardano posted slight gains, while Polygon declined 2.1%.

In the meme token segment, both Dogecoin and $TRUMP saw minimal price movement and were described as largely unchanged.