Bitcoin Stuck at $90,000 as That ‘Perfect’ Inflation Report Hides a Massive Data Error

US inflation was softer than expected and the Federal Reserve made its third consecutive rate cut. The Bank of Japan raised rates for the first time in three decades without causing a crisis.

On paper, the year-end macroeconomic picture looks friendlier than it has in months.

As of press time, Bitcoin (BTC) is up 4% since December 18, briefly reaching $90,000 again on December 22, only to plateau. No parabolic stretch, just a brief rally, followed by the same choppy range that defined the fourth quarter.

The mismatch between softer macroeconomic conditions and Bitcoin’s weak response begs the question: If rate cuts and cooling inflation aren’t enough to spark a rally, what’s holding the tape back?

The answer is in the details: tainted data, still-restrictive real returns, and Bitcoin’s own structural fragility.

Good news with asterisks

The November CPI produced the headline everyone wanted: 2.7% year-over-year versus 3.1% expected, with an underlying rate of 2.6% versus a consensus of 3.0%. This is the lowest core reading since 2021 and the first time that headline inflation is clearly within the 2%-3% band.

However, all serious macroeconomic notes point to the same problem: the six-week government shutdown meant that the October CPI was never published, and a portion of November prices were estimated rather than observed.

Rentals and some services were based on modeled data rather than actual market readings. Reports warned against treating this as a clean regime change.

Federal Reserve Governor John Williams leaned toward that skepticism. In his December 19 interview and speech, he called the CPI figure “encouraging,” but explicitly noted that both inflation and unemployment data remain distorted by lockdown-related gaps.

He later said there was “no immediate need” for more cuts and described the policy as “well balanced.”
That’s the opposite of a green light. Rates are falling, but the Federal Reserve is signaling that this particular good news is noisy and not a trigger for aggressive easing.

In the case of Bitcoin, traders are unlikely to get ahead of a massive wave of liquidity from a single tainted report. Markets are waiting for a clear January number before deciding whether November was a blip or a genuine slowdown.

Actual returns still look nothing like 2020-21

Even after three cuts and softer inflation, the macroeconomic system remains tight. The 10-year TIPS yield hovers around 1.9% as of Dec. 22, while the real long-term Treasury rate averages in the 1.5% to 2% range.

This is well above the negative real rates of 2020 and 2021, and keeps the discount rate on long-duration risk assets elevated.

The Federal Reserve ended quantitative tightening on December 1, but that does not mean quantitative easing (QE) has resumed. The bank notes confirm that the sell-off of Treasuries and MBS has stopped, and that the next phase is described as “reserve management” through limited purchases, not an increase in balance sheets.

Release H.4.1 on December 18 shows the Fed’s total assets are around $6.56 trillion, about $350 billion less than last year.

Williams emphasized that the new asset purchases are “technical” and “not QE,” aimed at keeping money markets orderly rather than engineering a meltdown of risky assets.

The direction of movement has shifted from tightening to less tightening, but real yields remain positive and the Fed is not pumping new dollars into the system.

Bank of Japan rise: anchor dropped, but the chain still loose

The Bank of Japan’s (BoJ) move to 0.75% was widely telegraphed and presented by Governor Kazuo Ueda as a slow normalization. Reports note that this marks the highest Japanese policy rate in three decades, with 10-year JGB yields hitting a 26-year high.

Macro desks are already writing the yen carry trade angle, calling the rise “structurally important,” noting that if markets begin to price in further increases, that could cause the carry trade to unravel and force de-risking across all global assets, including Bitcoin.

At this time, the yen has weakened again because Ueda emphasized gradualism. That gives operators a break, but leaves latent stress in the system. The BoJ removed the zero rate anchor, but has not yet pulled the chain.

Traders know that a true carry squeeze can cause declines of 20% to 30%, making them reluctant to raise leverage just because the first raise came without fireworks.

Bitcoin’s own liquidity is running out

Macroeconomic conditions explain part of the silent response, but Bitcoin’s internal structure explains the rest.
Glassnode’s Week 50 note describes BTC as range-bound due to large underwater supply between approximately $93,000 and $120,000, declining demand, and increasing loss realization every time the price rises.

Bitcoin’s 2% aggregate market depth fell about 30% from its 2025 peak, declining from about $766 million in early October to about $569 million in early December, just as ETF outflows hit $3.5 billion in November.

Additionally, liquidity purchasing is “drying up,” with coins primarily churning among existing players rather than being absorbed by new capital.

October’s rise to $126,000 pre-priced much of the “good news.” What remains is a market with decreasing depth, choppy ETF flows and a strong underwater supply band above spot.

What this means for 2026

The macro tape is no longer hostile, but it’s also not the kind of unequivocal balance sheet-driven boom that made 2020-21 seem inevitable.

Mild inflation and three Fed cuts would normally be rocket fuel, but this time the CPI data is distorted, the Fed is signaling “no rush,” and real yields remain positive. QT’s shift to a neutral policy has not yet transformed into a true wave of liquidity.

The Bank of Japan’s first hike, the highest in 30 years, removed the zero rate psychological anchor driving global carry trades, maintaining an excess over all leveraged risk trades.

Within cryptocurrencies, the market is waiting for a clear macroeconomic breakout or genuinely new liquidity, not simply another “good” headline.

Bitcoin is behaving like a half-mature macro asset, sensitive to conditions but not explosive. In that gap between weaker data and still tight real conditions, the expected boom is not materializing.