Key Highlights
- Bitcoin surged past $90K, trading at $90,250 (+2.2% in 24h), coinciding with the Fed’s $6.8B overnight repo injection.
- Altcoins rallied alongside Bitcoin, with analysts noting a bullish RSI divergence signaling potential bottom formation.
- Despite “Santa Rally” optimism, risks remain from $497M spot Bitcoin ETF outflows last week, cooled down whale activity, and ongoing macro tensions.
Ahead of the weekly opening in U.S. stock market, Bitcoin (BTC) swiftly surged past the $90,000 mark for the first time in the past two weeks, coinciding with the Federal Reserve’s scheduled overnight repurchase agreement (repo) operation injecting up to $6.8 billion into financial markets.
At the time of publishing, Bitcoin was trading at $90,250, surging 2.20% in the past 24 hours, and a 24 hour trading volume of $29 billion, with a market cap of $1.8 trillion—as per CoinMarketCap data.
Bitcoin had been consolidating in the high $88K earlier in the session, struggling below the psychological $90,000 barrier amid lingering macroeconomic uncertainty. The spike represented a notable push, driven by amplified moves in thin liquidity typical of the holiday season.
Following Bitcoin, Ether (ETH) has also spiked nearly 3% to $3,060, showing significant strength among all other altcoins. Other leading altcoins—including BNB, SOL, DOGE, and ADA—have also shown noteworthy gains in the past few hours.
Bitcoin reclaims $90K but risk still lingers
The latest move also revives hopes for a “Santa Rally,” with analysts noting strong support from institutional purchases and options positioning. However, resistance remains firm near recent highs, and a sustained break could target $92,000–$95,000 if momentum holds.
Fueling the market optimism, various crypto analysts have shared their positive stance on Bitcoin’s potential upper side movements. Ted Pillows, a renewed crypto personality, analyzes that the bullish RSI divergence has emerged on Bitcoin’s three-day chart, where the Relative Strength Index (RSI) forms higher lows while prices dip toward the $89,000 level. This signals toward weakening downward momentum. “When this happened the last 2 times, Bitcoin formed a bottom,” trader Ted noted on X.
However, the downside risk still lingers as the crypto market is navigating through macro tension, with spot Bitcoin ETFs witnessing $497 million in outflow last week. Moreover, the whale momentum around Bitcoin has also slowed down, hinting towards cooling on-chain activities following dramatic volatility in Bitcoin and other leading cryptocurrencies in the past two months.
Federal Reserve’s $6.8B liquidity injection
As per discussions on X, the U.S. Federal Reserve conducted an overnight repo operation on December 22 with a maximum offering of $6.801 billion, accepting bids to provide temporary cash to primary dealers against Treasury collateral. This technical measure addresses typical year-end strains where banks hoard reserves for regulatory and balance-sheet reasons, potentially spiking short-term rates.
It’s the latest in a series of operations totaling around $38 billion over the prior 10 days, separate from the ongoing $40 billion monthly Treasury bill purchases under the Reserve Management program initiated earlier in December.
This marks the central bank’s first such repo since 2020, aimed at easing year-end funding pressures. Crypto enthusiasts quickly linked the price spike to the liquidity boost, amplifying bullish sentiment across social media and trading platforms.
Unlike quantitative easing, these repos are short-term and targeted, expiring the next day. Still, markets—especially crypto traders—view any added liquidity as supportive for risk-on assets. While causation is hard to prove in volatile markets, the Fed’s proactive liquidity management has coincided with renewed Bitcoin strength. It highlights crypto’s sensitivity to central bank actions.
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