## Bitcoin Still Stuck in a Range: Why Inflation Reductions Haven't Triggered a Breakout?

Bitcoin is currently trading around $92.17K, but optimistic signals from the macro market seem insufficient to push the price beyond the fixed range. Instead of reacting strongly to economic data, major traders are focusing on deeper factors: real yields, ETF flows, and systemic liquidity conditions. This shift explains why positive inflation news no longer leads to sharp price volatility as before.

## Numbers Down, But the Market Remains Tepid

The latest CPI data for November shows a year-over-year increase of 2.7%, with core CPI at 2.6%. These figures align with the "interest rate cuts" narrative and monetary easing theory. However, the market did not respond as expected.

The issue lies in data quality. Disruptions caused by government shutdowns affected November data collection and excluded October CPI. Additionally, data released during holiday promotional periods reduces reliability. Traders are viewing these figures as confirmations of what is already known rather than new information.

## Rate Cuts: Only Part of the Equation

The federal funds target rate range is currently 3.50–3.75% after three cuts in 2025. But CME Group’s FedWatch—an instrument tracking market probability—shows a significant gap between market expectations and Federal Reserve forecasts. The Economic Outlook Summary indicates a median of only one cut in 2026.

This discrepancy is the main reason why "interest rate cuts" haven't freed Bitcoin from its trading range. What the market needs more is: **real yields must decline**.

## Real Yields: The True Brake

The 10-year TIPS real yield remains around 1.90%. This is a high level for risky assets like Bitcoin. When real yields stay at this level, even with nominal interest rates falling, financial conditions remain tight.

Simply put: cutting nominal rates but keeping real yields steady = financial conditions are not truly easing. Bitcoin needs to see **sustainable declines in real yields** to make the question "why hold cash?" lose its appeal.

## Systemic Liquidity: Hidden Tensions

The Fed New York’s Standing Repo Facility (SRF) reached a record $74.6 billion on December 31. Reverse repo balances also increased at year-end. This combination indicates: liquidity is available but not easily accessible.

This difference matters to leveraged traders. When repo pressure is high, borrowing becomes tighter, reducing risk appetite. The Fed’s balance sheet (tracked via WALCL) remains a key indicator for investors to confirm that liquidity is genuinely easing in a way that **supports sustainable risk acceptance**.

## ETF Flows: The Money Filter Channel

The market structure has changed since the launch of spot Bitcoin ETFs. Since November 4, about $3.4 billion has been withdrawn from US-based spot Bitcoin ETFs, with IBIT leading in outflows.

This has greater significance than expected:

**Pre-ETF**: Positive news directly triggered buying demand, pushing prices higher. **Post-ETF**: Positive news must pass through ETF flow channels first. If outflows occur, "good news" can be partially or fully absorbed by selling.

Daily patterns are crucial. A series of consecutive positive days can provide steady spot demand even amid macro noise. But continuous red days limit upward moves that previously could have lasted longer.

## Bitcoin Stays Put: The 81,000–93,000 USD Range

Glassnode identifies a clear zone with support around $81,000 and resistance near $93,000. The current price of $92.17K is close to the top of this zone, indicating the market is governed by a tight supply-demand balance.

As supply above is absorbed gradually, instead of a breakout, prices mainly oscillate sideways. This behavior is classic of "technical analysis," but now it’s reinforced by larger macro forces described above.

## What Needs to Change?

Two scenarios could help Bitcoin break out of this range:

**Scenario 1 (Negative)**: Continued pricing in rate cuts, sustained high real yields, ongoing ETF outflows. Bitcoin could remain trapped in the $81,000–$93,000 zone longer.

**Scenario 2 (Positive)**: Requires three factors to occur simultaneously:
- A downward trend in 10-year real yields
- A sustained reversal in daily spot ETF flows
- A clear breakout above the resistance level

## US Dollar: Foundation but Not Yet Strong Enough

The US dollar starts 2026 weaker, after the largest YoY decline in eight years. History shows a weaker dollar often supports macro assets like Bitcoin. But this time, it’s not enough to offset the negative combined effects of high real yields and ETF outflows.

## Conclusion: Bitcoin Awaits Actual Transmission

Bitcoin’s behavior resembles less an asset reacting instantly to "good news" and more an asset waiting for measurable transmission through interest rates, systemic liquidity, and ETF flow channels—bridges between macro and real spot demand.

Until these factors align, Bitcoin may continue trading sideways, with muted reactions to new headlines.