Bitcoin Declines Further as the Fed Shifts Policy

Bitcoin plunged to a low of $92,500 yesterday, triggering a massive wave of liquidations in the cryptocurrency market.

The digital currency recorded a new low for 2025 as Treasury yields surged and the US dollar index (DXY) hit a record high, reflecting investor concerns about the Federal Reserve’s monetary policy.

DXY started the week down 0.92%, after which Bitcoin suddenly jumped to $102,000. However, DXY quickly reversed course and peaked at 109.37 – its highest level since November 2022. The rise in DXY put a lot of pressure on Bitcoin, causing the value of the digital currency to decline. Analysts are concerned that yield curve control could become the focus of attention in the market again.

Bitcoin’s 7-day Market Value to Realized Value (MVRV) has now dropped to -2.63%, marking a sharp decline from 5.6% just two days ago. The MVRV metric is used to gauge whether Bitcoin holders are making or losing money by comparing the current value to the average purchase price.

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A negative MVRV value indicates that, on average, Bitcoin holders are making a loss, which could be a sign of capitulation or an undervalued market.

Based on historical trends, Bitcoin’s 7-day MVRV could fall further, to around -5% to -6% before recovering, as it did between December 20 and 23. If this pattern repeats, Bitcoin is likely to face further selling pressure in the short term, even testing lower support levels.