Analysis: BTC is hovering around $90,000, offering little short-term hedging benefit, possibly due to the Federal Reserve's balance sheet reduction draining market liquidity.

PANews reported on December 20th, citing Cointelegraph, that Bitcoin failed to hold the $92,000 mark over the past month and is currently hovering around $90,000. Some traders attribute this to market manipulation, while others blame the price decline on growing concerns about the artificial intelligence industry. Another major factor limiting Bitcoin's price increase is the Federal Reserve's balance sheet reduction for most of 2025, which has drained liquidity from financial markets. Although there are clear signs that the Fed is shifting towards a more accommodative monetary policy, traders are uncertain whether the Fed can lower interest rates below 3.5% in 2026. With investors' risk aversion rising, Bitcoin is unlikely to serve as a hedge in the short term.