Bitcoin finds technical support amid political deadlock and awaits a monetary catalyst

Bitcoin (BTC) is currently trading around US$ 96,820, marking a 1.90% recovery in the last 24 hours, but remains stuck in a consolidation pattern that has lasted over two months. The recent trajectory of the asset reveals a stratified market between different perspectives: while the Washington session continues to be marked by deliberations on tariff policies that could reshape risk appetite, traders await more robust signals from the US central bank to direct capital more decisively.

Macroeconomic context: frozen interest rates and resilient unemployment

The dovish stance of the Federal Reserve remains the backdrop for understanding the relative apathy in the crypto market. Although recent unemployment data surprised to the downside, suggesting strength in labor demand, this strength was not enough to persuade the central bank to resume interest rate cuts before the end of January. Maintaining the basic rate at current levels acts as an impediment for currencies without intrinsic yield, reducing Bitcoin’s attractiveness differential compared to traditional alternatives.

This monetary standstill partially explains why large fund managers prefer to keep capital in cash. Without an explicit liquidity catalyst emanating from Washington, the narrative of “there’s no reason to buy now” has become dominant on derivatives trading desks.

Technical inertia zone: when noise outweighs signal

BTC/USD pairs continue to oscillate within a narrow range, marked by support levels at US$ 88,000 and resistance at US$ 92,000. Short-term traders recognize this dynamic as a hostile environment for directional moves, with 5% fluctuations being insufficient to generate profitability after operational costs.

The 200-period moving average remains as a zone of indecision on smaller timeframes, while the Ichimoku cloud signals compression. Technical experts point out that this prolonged compression has historically preceded explosive moves, although the direction of the breakout remains open. A decisive breakout above US$ 92,000 with significant volume could trigger a breakout of other levels, while a drop below US$ 88,000 could expose supports not revisited since the end of 2025.

The silent phenomenon in old wallets: massive distribution of LTH

While sideways price action prevailed, a tectonic movement was occurring in Bitcoin’s supply structure. Long-term holders (LTH) began an unprecedented distribution process in 2025, releasing approximately US$ 300 billion worth of Bitcoin back into the market. The most intense period of this dynamic occurred between mid-November and mid-December, marking the largest volume of old coin dumps in over five years.

This outflow from dormant addresses did not occur gradually but in sharp waves, with LTH supply falling from 15.4 million to 13.5 million BTC. The monthly peak of distribution reached the historic mark of 1.14 million BTC in November, indicating that it was not just profit-taking, but a structural capitulation.

Historical lessons: when seller exhaustion precedes recoveries

Bitcoin’s history offers illustrative parallels. In 2018, the LTH supply plummeted before the price hit the bottom at US$ 3,500, serving as a basis for the subsequent rally that took the asset to US$ 11,000. In the 2020-2021 cycle, the distribution of old coins coexisted with price expansion up to US$ 61,000, demonstrating that dump and rally can occur simultaneously.

The 2025 movement, however, was more abrupt and concentrated. The interruption of this distribution in December, with LTH supply stabilizing at 13.6 million BTC, suggests that the exhaustion phase may be nearing its end.

The LTH/STH indicator as a beacon for the next cycle

The ratio between long-term and short-term supply (LTH/STH) provides a complementary metric to validate this transition hypothesis. In December, this index fell to -0.53, a level that historically precedes the formation of solid bases in subsequent weeks.

Whenever this ratio reaches values equal to or below -0.5, Bitcoin tends to compress volatility before momentum expansion. The current stabilization of supply suggests that new buyers are absorbing the inventory dumped in the previous quarter, creating a fundamental balance to absorb future external pressures, whether from tariff decisions or monetary deliberations.

Convergence of factors: expectation for institutional clarity

The current picture shows a convergence between technical desire (compression that precedes movement), long-term behavior (seller exhaustion), and macro dynamics (monetary pause). The absence of an explicit trigger factor keeps Bitcoin in limbo, but the sequence of events in the coming weeks—from tariff deliberations to Federal Reserve meetings—could provide the necessary catalyst to break this inertia.