Bitcoin Nears Key Support at $90,000 Amid Growing Outflows
Bitcoin (BTC) is trading close to the crucial $90,000 support level on Wednesday. A close below this mark could lead to further declines. Institutional demand is weakening, with US-listed spot Bitcoin ETFs seeing over $370 million in outflows on Tuesday. These outflows have been ongoing since November 12, signaling rising selling pressure. Long-term holders have been reducing their Bitcoin holdings for months, and ETF investors are now increasing their sales.
Rising Sell Pressure and Risky Leverage in Bitcoin Market
A report from K33 Research highlights strong sell-side pressure on Bitcoin. Long-term holders and ETF investors have both reduced their positions recently. The Bitcoin derivatives market shows a dangerous rise in leverage. Funding rates have increased alongside open interest in perpetual contracts, reaching the highest levels since April 2023. Traders placed many limit orders hoping for a quick rebound after BTC hit six-month lows. However, no recovery has occurred, leaving high leverage that could trigger sharp price swings.
“Every long position is balanced by a short position, so squeeze risks exist in both directions,” the K33 analyst said. “Funding rates show clear long-side aggression.”
Bitcoin Price Outlook and Key Levels to Watch
Historical data shows Bitcoin fell over 30% during past downturns, including March 2024 and Q1 sell-offs. A similar drop now would bring BTC to about $84,000–$86,000. K33 warns that the rising leverage in derivatives might push prices toward these lows or lower.
The average cost basis for BTC ETF holders is $89,651. Bitcoin briefly dropped below this level on Tuesday to $89,183. This area was also important during the Q1 decline. Another key level is MicroStrategy’s cost basis at $74,433, near Bitcoin’s April 7, 2025 low. Though some think a drop below this would force MicroStrategy to sell, it mainly remains a psychological target.
Bitcoin started the week weak, falling 2% and closing below the 61.8% Fibonacci retracement at $94,253. On Tuesday, BTC dipped to $89,253 but rebounded above the $90,000 level, closing at $92,960. On Wednesday, it trades near $91,300.
If $90,000 support holds, Bitcoin could rise toward $94,253. The Relative Strength Index (RSI) suggests bearish momentum is easing, allowing for a possible short-term rebound. If BTC closes below $90,000, the next support is near $85,000.
