The cryptocurrency market faced a mixed outlook on February 19th, with Bitcoin trading nearly 46% below its October peak of $126,000. While the Federal Reserve dashed hopes for a March interest rate cut, it simultaneously injected significant liquidity into the system. Furthermore, prediction market odds for the passage of the key CLARITY Act surged to 90%, and debates over quantum computing risks and Bitcoin’s dormant supply continued.
Cryptocurrency traders navigated conflicting signals as Bitcoin’s price remained under pressure. The asset was still down significantly from its all-time high recorded in October.
Market expectations for a Federal Reserve rate cut in March vanished entirely. Data from the CME FedWatch Tool showed a 94.1% probability that rates would hold steady.
However, the central bank also conducted a substantial $18.5 billion overnight repurchase operation. This represented one of the largest liquidity injections seen in years.
Regulatory sentiment shifted dramatically as odds for the CLARITY Act being signed into law surged to 90% on Polymarket. This potential legislation could reshape institutional confidence in crypto markets.
Ongoing concerns about quantum computing risks resurfaced, focusing on dormant Bitcoin holdings. Approximately 18% of the total Bitcoin supply is considered lost or inactive.
MicroStrategy CEO Michael Saylor addressed these concerns directly. He stated, “The network upgrades, active coins migrate, lost coins stay frozen. Security goes up. Supply comes down. Bitcoin grows stronger.”
Institutional accumulation has been a major countervailing force in this cycle. Entities have absorbed nearly as much Bitcoin as the estimated dormant supply since 2020.
Meanwhile, exchange balances continued their persistent decline industry-wide. Bitcoin’s price was defending a key ascending support level near $57,000.
