Bitcoin Bounces Back After Brief Dip Below US$90K, Despite Fed Jitters

After dipping below US$90,000 on Monday, Bitcoin managed to regain ground as investors seized the opportunity to buy in at lower prices. The market's resilience came despite ongoing concerns that the Federal Reserve may hold off on cutting interest rates as much as traders had hoped.

By late afternoon, Bitcoin was down just 0.2%, trading at US$94,192, having rebounded from a session low of US$89,665. The quick recovery suggests there’s still an appetite for the world’s largest cryptocurrency; even as broader market uncertainties linger.

Why Did Bitcoin Slip Below US$90K?

Bitcoin’s stumble last week wasn’t exactly surprising - the crypto market has been hit with a steady stream of negative headlines lately. One of the main factors weighing on Bitcoin prices is the news that the U.S. government is preparing to sell off a huge chunk of seized Bitcoin, worth around US$6.5 billion.

The Department of Justice recently got court approval to sell the Bitcoin, which had been confiscated from the Silk Road black market. This isn’t the first time the government has liquidated seized Bitcoin, but the sheer size of this potential sale has some investors worried. It’s a classic supply-and-demand issue: more Bitcoin flooding the market could put downward pressure on prices.

And it doesn’t help that the idea of a “strategic Bitcoin reserve” — something floated during the Trump administration — now seems to be off the table.

The Bigger Picture: Fed Rates and Treasury Yields

Beyond the government’s Bitcoin stash, the broader macroeconomic picture is adding to the pressure on crypto. Rising Treasury yields and the potential for fewer rate cuts by the Fed are keeping the U.S. dollar strong — and that’s usually bad news for Bitcoin.

When interest rates rise, it tends to pull liquidity out of riskier assets like crypto, and the stronger dollar makes Bitcoin relatively more expensive for investors using other currencies.

Some analysts are warning that if yields stay elevated, Bitcoin could struggle to stay above US$90,000. “High yields have a way of sucking the life out of speculative assets,” one strategist said.

MicroStrategy Keeps Stacking Bitcoin — No Matter What

Meanwhile, one major player in the Bitcoin space isn’t fazed by the recent market volatility: MicroStrategy. The business intelligence firm, led by Bitcoin evangelist Michael Saylor, has been on a buying spree — and it’s showing no signs of slowing down.

Last week, the company bought another 2,530 BTC for a cool US$243 million. That brings its total Bitcoin holdings to 450,000 BTC, making it one of the largest corporate Bitcoin holders in the world.

What’s interesting is that MicroStrategy’s average purchase price is around US$62,691 per Bitcoin, meaning the company is still well in profit, despite recent fluctuations.

For Saylor, it’s a long-term game. He’s been vocal about his belief that Bitcoin is the ultimate store of value, often comparing it to digital gold. His relentless buying suggests he’s not worried about short-term price swings — if anything, he seems to see dips as buying opportunities.

What’s Next for Bitcoin?

Bitcoin’s ability to bounce back above US$90,000 shows there’s still plenty of demand for it, even in a choppy market. But there are some big questions looming:

Will the Fed follow through with rate cuts this year? Will the government’s Bitcoin sales drag prices lower?

For now, it seems like investors are cautiously optimistic. The dip-buying crowd is still alive and well, and as long as that’s the case, Bitcoin has a way of surprising us all.