Bitcoin in the purgatory trap: When stagnation replaces the cycle

As Bitcoin dances on the edge of $90,000–$120,000, leaving behind the record of $126,080 from early October, the market faces an unprecedented phenomenon. This is no longer classic fluctuations between a bull and a bear — it is an extended phase of gridlock, where Bitcoin follows the logic of a mature asset rather than the frantic jumps of the past.

The latest reading shows BTC trading at $91,550 with a 0.97% increase over 24 hours. The statistic appears optimistic at first glance, but when compared to the dramatic drop from October’s highs, the picture becomes more complex.

From euphoria to passivity: The paradigm is shifting

Cryptocurrency experts are increasingly talking about a transformation of the system. Instead of a four-year halving cycle, Bitcoin is entering a prolonged consolidation phase. A historical comparison is gold — from April 2020 to March 2024, the precious metal moved between $1,650 and $2,050, creating a stable trading range. Bitcoin is following a similar path.

Current dynamics show a shift of securities from weaker hands to institutional investors. This process occurs without dramatic price movements — no euphoria at the highs, no panic at the lows. It is a purgatory for traders raised on the epic halving explosions.

Selling pressure is focused around the $120,000 zone, where earlier buyers are trying to realize profits. This level has become a psychological barrier — every attempt to break through encounters systematic selling.

Macroeconomics versus market expectations

The Federal Reserve of the United States has cut interest rates by 25 basis points to a range of 3.50–3.75%. Simultaneously, it launched the (RMP) reserve management program, through which it will buy short-term treasury bonds worth $40 billion monthly, starting December 12.

The official justification — ensuring liquidity in the repo market and financial system stability. However, analysts see a deeper game. The expansion of the Fed’s balance sheet without extending the maturity of bonds is technically not quantitative easing (QE), but its functional equivalent.

Capital flows are obvious: when the Fed buys securities, holders of these securities receive cash. This cash must find an outlet — directed into loans, stocks, and alternative assets, including cryptocurrencies. In the current environment of low real interest rates, Bitcoin acts as a hedge against currency devaluation.

Expert synthesis: six to eighteen months of uncertainty

Economists specializing in macroeconomics associate current conditions with long-term stagnation. The scenario suggests a period from half a year to a year and a half of intense consolidation in financial markets, where the supposed averaging of Bitcoin’s price will persist under the pressure of increasing reserves and less dramatic Fed movements.

Opinions on the cause diverge. Some point to automatic money printing to finance the budget deficit, others speak of real inflation exaggerated by political semantics.

What is a common point: Bitcoin in its purgatory phase is no longer susceptible to classic cycle-logic. It is the golden beast of a new generation — an asset that absorbs institutional capital flows with cold determination, while traditional bull-bear narratives lose their power.

Imaginations of dramatic rises or crashes are dispelled by the gravity of the changing monetary landscape. On the horizon, there is only one thing: Bitcoin waits in purgatory, consumed by the liquidity it has itself generated.