Key Points
- Bitcoin’s price has fallen below the $90,000 support level, causing concern among traders.
- Institutional investors are showing decreased interest in Bitcoin, as evidenced by a five-day streak of net outflows on U.S. Spot Bitcoin ETFs.
Bitcoin’s price dipped below $90,000 on Tuesday, marking the first time in three months that it has fallen below this support level. This has created a negative sentiment among traders, with the Crypto Fear & Greed Index indicating a shift from “neutral” and “greed” to “fear”.
Shift in Institutional Investment
A new trend has emerged among institutional investors as Bitcoin’s price corrects. The five-day streak of net outflows on U.S. Spot Bitcoin ETFs has raised questions about whether institutional investors are withdrawing their support for Bitcoin.
After reaching a new all-time high of over $109,000, Bitcoin’s price has declined due to factors such as declining institutional investor interest, U.S. macroeconomic developments, and supply on exchanges. On-chain data from Santiment indicates that while supply on exchanges is increasing, supply outside of exchanges (held by whale wallets) is decreasing.
Impact on Bitcoin’s Price
This shift in holdings is considered a bearish sign for Bitcoin, as it suggests an expectation of further price decline. The decline in Bitcoin holdings of institutions, as indicated by the decreasing BTC supply held by funds, is consistent with the negative flows observed by Farside Investors.
CoinShares’ fund flow data shows that institutions have withdrawn $595 million from Bitcoin funds this month. Meanwhile, Ethereum, Solana, XRP, and multi-asset funds have seen inflows. This outflow from Bitcoin-based funds has negatively affected net week flows in crypto.
Santiment’s on-chain analysis data shows a decline in Bitcoin transactions valued at $100,000 or more and $1 million or higher. This decrease in whale transactions, coupled with consistent profit-taking, can increase selling pressure on Bitcoin and negatively impact its price.
Technical Indicators and Future Predictions
Bitcoin’s price fell below the key support level of $90,000 on Tuesday, trading at $88,976.24 at the time of writing. Technical indicators suggest that further price correction is likely. The next key support level after $90,000 is $70,577. If this support level is breached, Bitcoin may drop to $67,476.
Markus Thielen of 10xResearch provides a technical analysis of Bitcoin’s price in his latest publication. He identifies an Ascending Broadening Wedge pattern in Bitcoin’s price chart, suggesting that a downside breakout could occur.
Ilman Shazhaev, Founder & CEO of Dizzaract, discusses the impact of the Bybit hack on Bitcoin’s price. Despite the negative sell pressure in the market, Shazhaev believes that the current price action will not last long.
Dr. Sean Dawson, Head of Research at Derive.xyz, comments on the bearish shift as institutional funds exit their positions in Bitcoin. He attributes the 4.5% drop in Bitcoin’s price in the last 24 hours to the continued exodus of institutional funds from major BTC ETFs.
Traders on the decentralized options platform have reacted to recent developments by adjusting their positions, resulting in a slight increase in BTC 7-day at-the-money implied volatility (ATM IV). This reflects a heightened market uncertainty in Bitcoin’s price.
