Market Repricing Driven by Macroeconomic Signals
Bitcoin continued its downward trend on Friday, dropping 3% during the day and falling below the $95,000 level. This movement appears to be part of broader repositioning across digital asset markets as investors respond to changing macroeconomic conditions. According to James E. Thorne, Chief Market Strategist at WellingtonAltus, the current price pullback reflects structural changes within the Federal Reserve system and growing institutional interest in Bitcoin.
Thorne suggests that the U.S. government reopening after a 43-day shutdown and the Treasury’s renewed management of its accounts signal potential liquidity injections into financial markets. He expects quantitative tightening to end soon, which could lead to continued rate cuts until the federal funds rate approaches 2.75%. The upcoming 2026 reshaping of the Federal Open Market Committee, including potential leadership changes, might mark significant shifts in monetary policy direction.
Technical Indicators Show Bearish Momentum
Bitcoin currently trades around $95,558, with technical indicators pointing to continued weakness. The Parabolic SAR dots remain above price action, indicating ongoing trend weakness. The Breakout Probability model shows a concerning 55.57% downside skew, with only 31.66% upside potential, reinforcing the bearish near-term structure.
Momentum appears fragile, with the daily RSI sitting at 31.15 – near oversold territory but lacking any bullish divergence. The BBP indicator shows a deep negative reading of -11,537, confirming that bearish momentum is accelerating rather than stabilizing. Moving averages provide little comfort, with Bitcoin trading well below the 50-day, 100-day, and 200-day simple moving averages, all clustered around $110,000 to $112,000, now acting as layered resistance.
Critical Support Levels and Recovery Scenarios
A clean bounce from the $94,500 level becomes crucial to prevent a deeper slide toward $92,000, which represents the next high-liquidity support zone. If buyers successfully defend this region, a recovery toward $100,000 becomes feasible, followed by a potential retest of $105,000 should momentum improve. However, the bullish continuation setup only activates if Bitcoin breaks above $110,078, the level where the SAR and moving averages converge and currently cap the structure.
Thorne identifies what he calls a housing recession as a direct consequence of the Fed’s policy decisions, noting that backward-looking indicators and overtightened financial conditions have distorted credit availability. Despite these challenges, he points to surging Bitcoin adoption driven by forthcoming regulatory clarity and Bitcoin’s unique digital scarcity characteristics.
Institutional Engagement and Long-Term Outlook
Institutional engagement continues to deepen as Wall Street integrates Bitcoin across trading, custody, and structured products. Thorne argues that selling Bitcoin during what he sees as a liquidity expansion cycle reflects persistent investor irrationality. The current market conditions, while challenging in the short term, might actually strengthen Bitcoin’s long-term investment thesis.
Invalidation of any potential recovery occurs on a daily close below $92,000, which would confirm a broader bear cycle extension, potentially exposing the $88,500 level next. The market appears to be in a delicate balancing act between short-term technical pressures and longer-term fundamental drivers.
