Bitcoin Stalled at $90,000 Due to “Perfect” Inflation Report Concealing a Significant Data Error

Macroeconomic Overview: Recent Developments in Inflation and Monetary Policy

The recent economic landscape in the United States has demonstrated a notable deceleration in inflationary pressures, with the Federal Reserve (Fed) implementing its third consecutive interest rate reduction. Concurrently, the Bank of Japan (BoJ) has undertaken a significant policy shift by raising interest rates for the first time in three decades without precipitating a financial crisis. Collectively, these developments suggest that the macroeconomic environment approaching year-end appears markedly more favorable than it has been in recent months.

As of December 23, 2025, Bitcoin (BTC) has experienced an uptick of approximately 4% since December 18, briefly retesting the $90,000 threshold on December 22 before encountering resistance. This price action is characterized not by a parabolic surge but rather by a transient spike followed by the continued choppy trading patterns that have defined the fourth quarter. The apparent disconnect between the improved macroeconomic indicators and Bitcoin’s subdued response necessitates an inquiry into the underlying factors inhibiting market enthusiasm.

Dissecting the Underlying Causes of Market Reluctance

Several critical elements contribute to the muted market reaction despite ostensibly favorable macroeconomic conditions:

• Contaminated Data: The integrity of recent economic data is called into question by anomalies such as the six-week government shutdown, which precluded the publication of October’s Consumer Price Index (CPI). Consequently, much of November’s pricing information was derived from estimates rather than direct observations.
• Restrictive Real Yields: Despite recent rate cuts, real yields remain elevated, complicating investment decisions for risk assets such as Bitcoin.
• Structural Fragility of Bitcoin: The inherent vulnerabilities within Bitcoin’s market structure further exacerbate its response to macroeconomic shifts.

Macro Data Implications: November CPI Report Analysis

The November CPI report showcased a headline inflation rate of 2.7% year-over-year, notably below the anticipated 3.1%, with core inflation recorded at 2.6%, against a consensus prediction of 3.0%. This marked a significant milestone as it represented the lowest core reading since 2021 and indicated that headline inflation had returned to the 2%-3% target range.

However, skepticism permeates this seemingly positive development. Analysts have flagged concerns regarding potential data inaccuracies stemming from estimations used to account for missing October data. Specifically:

• The reliance on modeled data for rents and certain services raises questions about the robustness of these figures.
• Fed Governor John Williams has expressed caution regarding this CPI data, acknowledging distortions resulting from shutdown-related reporting gaps.

Williams articulated that there is “no immediate need” for further rate cuts, positioning current policy as “well balanced.” This stance underscores that while rates are decreasing, it does not constitute an unequivocal endorsement for aggressive monetary easing. Consequently, Bitcoin traders are likely reticent to preemptively position themselves for a liquidity influx based solely on a potentially flawed report. The market anticipates a clearer CPI reading in January to ascertain whether November’s figures represent an anomaly or an authentic downtrend in inflation.

Real Yields: Divergence from Preceding Market Conditions

Despite three rate reductions and declining inflation metrics, prevailing macroeconomic conditions remain constricted. As of December 22, 2025, the yield on 10-year Treasury Inflation-Protected Securities (TIPS) hovers around 1.9%, with long-term Treasury real rates averaging between 1.5% and 2%. This scenario starkly contrasts with the negative real yields experienced during the 2020-2021 period and contributes to an elevated discount rate impacting long-duration risk assets.

The cessation of quantitative tightening (QT) on December 1 does not equate to a reinitiation of quantitative easing (QE). Current Fed communications indicate that Treasury and mortgage-backed securities runoff remains halted; future asset purchases are characterized as “technical” measures intended to maintain orderly money market conditions rather than stimulating risk asset appreciation. The total assets held by the Fed stand at approximately $6.56 trillion, reflecting a decrease of roughly $350 billion over the preceding year.

The Bank of Japan: Policy Shift Analysis

The BoJ’s decision to raise interest rates to 0.75% has been widely anticipated and framed by Governor Kazuo Ueda as part of a gradual normalization process. This adjustment marks a critical threshold as it represents the highest Japanese policy rate in thirty years and coincides with a surge in 10-year Japanese Government Bond (JGB) yields to levels not seen in over two decades.

Market analysts have begun to explore the implications of this hike on global carry trades, suggesting that if market participants begin pricing in additional rate increases from the BoJ, it could precipitate unwinding within carry trades and compel forced de-risking across various asset classes, including Bitcoin.

Despite this development, the yen has exhibited renewed weakness as Ueda emphasized a gradualist approach concerning monetary policy adjustments. Although this creates temporary leeway for traders, it simultaneously maintains underlying tensions within broader financial systems. The BoJ’s exit from a zero-rate policy does not imply an immediate tightening effect on global liquidity; rather, it signals cautious movement towards normalization without exerting substantial pressure on leveraged risk assets.

Bitcoin’s Market Dynamics: An Internal Examination

The muted response from Bitcoin can also be attributed to intrinsic factors affecting its market structure. According to Glassnode’s Week 50 report, Bitcoin remains entrenched within a range-bound trading pattern due to significant underwater supply between approximately $93,000 and $120,000 combined with diminishing demand and heightened loss realizations during price fluctuations.

The aggregated market depth for Bitcoin has contracted by nearly 30% from its peak earlier in 2025—falling from approximately $766 million in early October to around $569 million by early December—while ETF outflows reached $3.5 billion in November alone. Furthermore:

• The buying liquidity is increasingly being depleted; transactions predominantly involve existing holders rather than new capital inflow.
• The prior surge to $126,000 appears to have pre-priced much of the favorable news surrounding Bitcoin.

Implications for Market Outlook in 2026

The current macroeconomic environment no longer presents overt hostility; however, it lacks the unequivocal momentum characterized by balance-sheet expansion that underscored the bullish market conditions seen in 2020-2021. While softening inflation alongside three Fed cuts would typically serve as catalysts for heightened market activity, present circumstances reveal complications:

• The CPI data is marred by distortions necessitating cautious interpretation.
• The Fed’s communication suggests no immediate urgency for further easing measures.
• Real yields continue to remain positive despite shifts towards less stringent monetary policies.

The BoJ’s recent hike has effectively removed a psychological anchor that previously facilitated global carry trades while leaving an overhang on leveraged risk positions across various markets. Within the cryptocurrency sector, participants are awaiting either a definitive macroeconomic pivot or genuine liquidity influx—not merely another favorable headline—before committing capital decisively.

This analysis indicates that Bitcoin is currently behaving akin to a semi-mature macro asset: responsive yet lacking explosive potential amid an environment defined by softening data juxtaposed against persistently tight real yield conditions where anticipated market booms remain elusive.