Bitcoin Rebounds Past $90K: How Fed Policy Shift and ETF Capital Drive Market Recovery

Market Recovery Fueled by Softer Monetary Policy

Bitcoin surged past $90,000 in early December 2025 as markets priced in a 70% probability of Federal Reserve rate cuts, signaling a significant shift in monetary policy. The rebound reflected broader market sentiment changes, with the asset class bouncing from “extremely oversold” conditions visible on the relative strength index (RSI). Over $206 million in liquidations during the weekend and thin market depth created conditions favorable for recovery, as selling pressure eased.

Currently trading around $90.76K with modest 24-hour movement, Bitcoin’s recovery coincided with the broader crypto market gaining 3.29% to reach $2.95 trillion in total valuation. Alternative tokens participated in the rally, with XRP and ZEC experiencing significant volatility in recent sessions.

ETF Inflows Drive Institutional Participation

The turning point for Bitcoin came through institutional channels. Bitcoin ETFs attracted $238 million in net inflows on Friday, reversing a multi-week outflow pattern that had pressured prices. This capital injection signaled renewed institutional confidence and played a crucial role in establishing support levels.

The ETF landscape revealed interesting divergences. BlackRock’s iShares Bitcoin ETF (IBIT) received $60.61 million in inflows after recording its largest redemptions since launch, while Grayscale’s Dogecoin ETF (BWOW) and the XRP ETF (GXRP) attracted meaningful allocations. Notably, Solana spot ETFs pulled in $55 million for the 16th consecutive day, indicating a strategic rotation toward smaller-cap tokens. Ethereum ETFs, by contrast, saw $37 million withdrawn, highlighting shifting investor preferences.

Technical Signals and Expert Analysis

Market technicians identified bullish patterns emerging. Bitcoin’s test of its 100-week moving average and Tom DeMark’s buy signal for XRP offered technical confirmation of the recovery narrative. Industry analysts including Raoul Pal and Ali Martinez highlighted these formations as potential indicators of further upside trajectory, though resistance remained a consideration around $90,000 levels.

The technical setup suggested that after weeks of weakness, market structure began favoring buyers, though short-term volatility remained elevated.

Headwinds: Index Removal Concerns and Retail Sentiment

Not all developments supported the bullish case. Discussion surrounding the potential removal of crypto treasury-holding companies from major market indices in January 2026 generated controversy. Some market participants urged boycotts of financial institutions perceived as hostile to crypto assets, arguing such moves could force portfolio adjustments and create selling pressure.

Retail sentiment remained deeply divided. The Crypto Fear and Greed Index dropped to 11, reflecting elevated caution, while $605 million in leveraged positions faced liquidation—evidence of underlying market fragility despite headline recovery.

Looking Ahead: The Role of Fed Decisions and Macro Tailwinds

With the Federal Reserve’s December meeting approaching and spot ETFs expanding the institutional investment toolkit, markets approached a critical inflection point. Federal Reserve governors including John Williams had indicated openness to rate adjustments to address moderating inflation and labor market softness, creating a supportive backdrop for risk assets.

Longer-term technical patterns and growing institutional participation suggested underlying demand remained intact. While year-end profit-taking and near-term resistance could limit immediate gains, the combination of supportive macro conditions and institutional capital inflows positioned Bitcoin toward a potentially more durable recovery if current policy trajectories materialize.