As 2025 draws to a close, Bitcoin is sending conflicting signals to the market. Substantial outflows from U.S. spot ETFs are weighing heavily on the price. However, on-chain data reveals that large-scale investors are using the dip to accumulate holdings. The immediate future hinges on whether a crucial support level can hold, a factor that will significantly influence the digital asset’s trajectory heading into 2026.

The cryptocurrency is currently trading near $87,200, hovering just above its 52-week low and well below its early October peak. Technical indicators reflect a fragile state: the Relative Strength Index (RSI) sits at 38, signaling weakness, and the price remains below the 50-day moving average of approximately $91,700. This paints a picture of a market in a precarious consolidation phase.

Institutional Outflows Cast a Shadow

A primary source of recent selling pressure is institutional. U.S. spot Bitcoin ETFs are experiencing significant year-end withdrawals, driven largely by tax-loss harvesting and portfolio de-risking.

• In the week leading into the holiday weekend, these funds saw a net outflow of roughly $825.7 million.
• This followed a weak prior week (ending December 19), which recorded net outflows of $497.1 million.
• Combined, over $1.3 billion has exited these products in the last two weeks of December.

The iShares Bitcoin Trust (IBIT) from BlackRock and the Grayscale Bitcoin Trust (GBTC) have been notably impacted, registering substantial redemptions. Concurrently, many corporate treasuries are focusing on year-end balance sheet management rather than new Bitcoin allocations, a trend exacerbated by a market sentiment reading of “Extreme Fear.”

Whales Provide Counterweight to ETF Selling

Blockchain activity tells a contrasting story. Addresses holding over 1,000 BTC—commonly referred to as “whales”—are reportedly using the price decline to build positions, according to on-chain metrics. These entities are acting as a counterforce to the ETF selling, absorbing a portion of the downward pressure.

An interesting volatility anomaly has also emerged. The realized volatility stands at about 37.8%, while the implied volatility from the options market is significantly lower at approximately 15.1%. Historically, such periods, where the market prices in calm despite observable swings, have often preceded more decisive price movements once expectations realign with reality.

Key Technical Levels to Watch

From a chart perspective, two price zones are paramount:

Should investors sell immediately? Or is it worth buying Bitcoin?

• Resistance: Analysts identify the next substantial ceiling around $90,650. A sustained break above this level could trigger a short-term recovery rally toward $97,000.
• Support: The area near $85,000 is viewed as a critical “Point of Control.” A decisive and sustained breakdown below this support would confirm a bearish descending triangle pattern on the daily chart, potentially opening a path toward $80,000.

The analysis differs across time frames. While the daily chart suggests a bearish descending triangle, some analysts point to a bullish ascending triangle formation on the 4-hour chart. Should trading volume return after the holidays, this could set the stage for a short squeeze—provided the key support holds.

Derivatives Expiry and Prevailing Sentiment

A large batch of Bitcoin options expired on December 26. This expiration removed a significant volume of open contracts from the market, thereby weakening the “max pain” effect that had likely been suppressing prices below $90,000.

Nevertheless, pessimism remains dominant in sentiment gauges. The Fear & Greed Index reads 23, indicating pronounced risk aversion. While such periods of extreme fear have historically been used by contrarian investors to establish positions, the short-term technical trend remains clearly damaged.

The 2026 Outlook: A Mixed Bag

Despite a weak finish to the year, the outlook for 2026 is not uniformly negative. On the macro front, monetary policy plays a role: the U.S. Federal Reserve recently injected over $2.5 billion in liquidity into the banking system—an environment that has historically been favorable for scarce assets like Bitcoin.

Expert opinions, however, are divided. Firms like Bitwise express optimism, anticipating positive impulses from clearer regulations and ongoing adoption. Other market participants foresee a year of tough consolidation, especially if macroeconomic conditions tighten again.

In the immediate term, the trend for Q1 2026 will likely be decided by whether the $85,000 support level holds and if the ETF outflows subside after the turn of the year.

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