Bitcoin Market Update: Bears Take Control Amid $90K Speculations
The cryptocurrency market continues to experience volatility, with Bitcoin ([BTC](https://www.binance.com/en/trade/BTC_USDT?theme=dark)) experiencing significant downward pressure. This has opened a window for short sellers to capitalize on market dips, even as projections of Bitcoin reaching $90,000 persist in the near future.
Understanding the Current Downtrend
Following Bitcoin’s 23% drop in Q4, bearish momentum appears to be gaining steam. CryptoQuant’s data indicates a surge in Bitcoin selling pressure, surpassing levels seen during the 2025 tariff wars. This trend is highlighted by a sharp decline in the Taker Buy Sell Ratio metric, signaling bearish dominance.
ETF Outflows and Institutional Sentiment
Since December 18, U.S. Spot ETF products have reported consistent daily outflows. ETF demand has been tapering since mid-October, coinciding with broader weak market sentiment during the holiday season. Adding further strain, the Open Interest on the Chicago Mercantile Exchange (CME) futures market fell under $10 billion, a level not seen since September 2024. This drop points to a risk-off stance among institutional investors.
One of the driving factors behind this shift is the breakdown of the basis trade strategy. This once-popular strategy, which combined spot ETF buying and CME futures shorting to capture yield, has become less attractive. While yields peaked at 10% in early 2025, they have declined to approximately 5%, increasing risk and discouraging large institutional players.
Bulls vs. Bears: Key Levels to Watch
Bitcoin is currently navigating key support and resistance levels. Analysts predict a potential dip below $80K in early 2026, barring any significant catalyst to drive prices higher. However, should Bitcoin surge to $90,600, it may result in the liquidation of approximately $3 billion in leveraged shorts. This would likely trigger additional upward momentum, with $88.7K as the next target.
On the contrary, a volatile move downward could see leveraged longs at $83.9K and $86.1K liquidated. Options markets suggest concentrated activity near $85K for a dip and $88K and $90K as rally targets.
Risk Mitigation and Outlook
Market players are actively hedging their positions to prepare for possible downside risks. With Bitcoin’s price action likely to remain range-bound heading into 2026, traders and investors are carefully analyzing market sentiment and macroeconomic conditions before making significant moves.
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Stay tuned for more updates as we continue monitoring Bitcoin’s journey toward $90K and beyond.
