Bitcoin Reclaims $90K as ETF Inflows Return and Shorts Get Squeezed Ahead of FOMC

A day after broad selling, crypto risk appetite resurfaced. Bitcoin climbed back above $90,000 for the first time in a week, up 6.7% to $90,339 at the time of writing. That strength pushed total crypto derivatives liquidations past $312 million, including $157 million in Bitcoin shorts, and coincided with spot volumes more than doubling to over $92 billion. The move fell short of this year’s best single-day return—9.52% on March 2—but it reset momentum into a policy-heavy week.

Under the hood, this bounce looked less like a “random” relief rally and more like a flow-and-liquidity event feeding on itself. Last week, Bitcoin, Ethereum, and XRP exchange-traded products took in more than $1 billion, a turn in sentiment that often precedes price strength. That carried into Monday unevenly: Bitcoin ETFs stayed positive with $8.5 million in net inflows, while Ethereum ETFs saw $79 million in outflows and Solana funds faced $13.5 million in redemptions. The split matters. Inflows do not need to be huge to tighten the float; they just need to be consistent enough to push basis and force shorts to cover when spot starts to run.

Today’s squeeze was textbook. As BTC pushed through $90K, perps and futures shorts were forced to buy, reinforcing spot bids and accelerating the move. Dealers hedging ETF creations add a parallel impulse. When these mechanical flows align with thin liquidity—common around month- and quarter-end—the tape can move farther than fundamentals alone would justify. Traders know this pattern, and some lean into it, which is why volume spiked so quickly once key levels gave way.

Macro liquidity added another layer. The Federal Reserve ended its quantitative tightening program on Monday and injected $13.5 billion via overnight repos to ease year-end funding strains—the second-largest since the COVID period. It’s not QE and not a policy pivot; it’s a routine stabilizer. Still, when funding markets calm, risk assets often breathe easier. Prediction markets currently assign a 91% probability to a 25 bps cut at next week’s FOMC meeting (Dec. 9–10). That expectation keeps a bid under duration-sensitive trades and reduces the hurdle for crypto inflows, even if the underlying growth picture is mixed.

Ethereum tracked the move with its own catalysts. On the eve of the Fusaka network upgrade, ETH gained nearly 10% on the day and briefly reclaimed $3,000 for the first time since Sunday. XRP advanced 7.3% to $2.14. These moves were not uniform—ETF flows showed ETH softness and SOL redemptions—but they were directionally consistent with a market that is positioning into policy and protocol events rather than de-risking from them.

The important tell here is reflexivity: ETFs attract assets when prices rise, and those assets can push prices higher, especially when shorts are crowded and liquidity is patchy. That feedback loop cuts both ways. With markets still fragile into the FOMC, sustained strength likely depends on the flow picture holding up and the Fed avoiding surprises. For now, the combination of modest ETF demand, a mechanical short squeeze, and a temporary easing in funding markets was enough to pull Bitcoin back over $90K and revive risk-taking across majors.

Key figures at a glance: - BTC: $90,339, +6.7% 24h; $157M BTC shorts liquidated; $312M total crypto liquidations; spot volume >$92B - 2025’s best BTC daily return: +9.52% on March 2 - ETFs (last week): >$1B net inflows across BTC, ETH, XRP - Monday flows: BTC ETFs +$8.5M; ETH ETFs −$79M; SOL funds −$13.5M - Fed: QT ended; $13.5B overnight repo, second-largest since COVID - FOMC odds: 91% chance of a 25 bps cut next week - ETH: nearly +10% 24h; briefly >$3,000; Fusaka upgrade imminent - XRP: +7.3% to $2.14

Traders are treating these levels as tactical rather than structural. Until policy is in the rearview and ETF demand proves sticky, the market will reward disciplined position sizing and quick risk management more than hero trades.