The Federal Reserve’s anticipated 25 basis point Fed rate cut failed to dramatically sway the Bitcoin price. The rate cut initially caused a momentary spike in The Federal Reserve’s anticipated 25 basis point Fed rate cut failed to dramatically sway the Bitcoin price. The rate cut initially caused a momentary spike in

Historic Bitcoin Supply Shock Post-FOMC Lows

2025/12/14 23:56
Historic Bitcoin Supply Shock Post-FOMC Lows

The Federal Reserve’s anticipated 25 basis point Fed rate cut failed to dramatically sway the Bitcoin price. The rate cut initially caused a momentary spike in volatility, driving BTC toward $89,000. However, Bitcoin rapidly recovered, cementing its position in the $90K – $93K consolidation range.

Although the market’s sideways movement tested the patience of short-term traders, analytics confirm a significant shift toward market stabilization. Downward pressure on Bitcoin is fading; the second wave of post-FOMC selling proved markedly weaker, indicating a strong base is now forming.

Bitcoin Sees Historic On-chain Supply Shock

The most bullish factor is the extreme conviction visible in on-chain activity, signaling an impending Bitcoin Supply Shock. Long-term investors are aggressively removing coins from exchanges: Binance withdrawals hit their highest transaction level since May 2018, confirming a strong HODLing strategy and a massive shift to self-custody. At the same time, BTC deposits, which generally indicate the necessary fuel for selling, plummeted to an 8-year low.

Bitcoin Sees Historic On-chain Supply Shock

Bitcoin saw historically huge on-chain withdrawals. – Source: CryptoQuant

In other words, these historic on-chain trends, where participants actively remove supply and new selling pressure vanishes, are classic supply shock behavior. This move has pushed the total exchange balance of Bitcoin to a critical low of approximately 2.76 million BTC, continuing a year-long trend where 403,000 BTC left exchanges.

Bitcoin Sees Historic On-chain Supply Shock

BTC depositing transactions have also dropped for months. – Source: CryptoQuant

Macro Supports, Altcoins Struggle

Global macro conditions provided a supportive backdrop for Bitcoin. One of the typical inverse indicators for Bitcoin, namely the Dollar Index (DXY), sold off post-Fed, has reached its weakest point since mid-October. This DXY bearish trend generally benefits risk assets. Technical signals are confirming the potential for a move higher; the Bitcoin MACD histogram, set for a medium-to-long-term view, remains on the verge of a positive cross above zero, which would signal renewed bullish momentum.

In stark contrast, altcoins lagged severely. Assets like Cardano (ADA) and Avalanche (AVAX) declined 12% – 14%, which highlights selective investor focus on Bitcoin stability during transitional macro periods.

Disappointing ETF Flows Vanish

In addition, the primary risk factor cited in earlier analyses, disappointing ETF flows, has evaporated. Institutional demand has witnessed a material and continuous recovery in the crypto market as of early December, culminating in the sector logging its most significant net-positive week since October. Within only one single week, the influx nearly matches the entire cumulative inflows reported for the final four weeks of November, indicating a sharp revival of institutional appetite. For instance, the U.S. Bitcoin ETFs attracted $223.5 million in a single session.

With this major headwind removed, the technical BTC breakout becomes highly probable. A sustained move above the bearish trendline confirms the end of the downtrend. Bitcoin’s next major $108K resistance zone, defined by key moving averages, is the immediate target.

Bitcoin Waits For Next Targets & Risks

Strongly bullish sentiment now characterizes the revised market outlook, primarily fueled by the combination of historic supply removal and resurgent institutional buying. Analysts are confidently setting the major resistance zone near the 200-day Exponential Moving Average (EMA) at $108,000 as the primary target, expecting the initial $97,000 target to clear quickly.

Analytics firm Swissblock noted the downward pressure on Bitcoin is losing steam, with the market stabilizing. The firm added, “The second selling wave is weaker than the first, and selling pressure is not intensifying,” suggesting that while signs of stabilization exist, confirmation is still pending. According to Swissblock, the market still needs the Risk Index to drop below 25 and a reclaim of structural levels before definitively calling a bottom.

Market focus is shifting away from simple Fed decisions. The new market drivers shift toward U.S. crypto regulation and emerging scarcity dynamics, making supply constraints the dominant long-term narrative.

The post Historic Bitcoin Supply Shock Post-FOMC Lows appeared first on NFT Plazas.

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