The world’s leading cryptocurrency, Bitcoin, has failed to consolidate over the weekend, slipping below the $90,000 threshold following another downturn. Currently trading near $89,500, Bitcoin has shed between 2% and 3% of its value in the past day. This persistent negative sentiment in the digital asset space stands in stark contrast to gains seen across traditional equity indices.
A Perfect Storm of Selling Pressure
Bitcoin’s recent trajectory has been volatile. After rebounding from a Monday correction that pushed it toward $84,000, the asset managed to climb back above $90,000 by mid-week. It made several attempts to breach the $94,000 resistance level, all of which proved unsuccessful. The release of key U.S. inflation data (the PCE index) on Friday triggered another sharp reversal, sending prices lower.
This decline precipitated a significant wave of liquidations. Data from Coinglass indicates that on December 6th, positions worth over $414 million were liquidated. Within just the first 30 minutes of the price drop, nearly $100 million in long positions were forcibly closed. The broader cryptocurrency market felt the impact, with its total capitalization contracting by approximately $60 billion to around $3.13 trillion.
Spot ETF Outflows Compound Weakness
Adding to the downward pressure, U.S.-based spot Bitcoin exchange-traded funds (ETFs) have experienced notable capital withdrawals. On December 4th, these funds registered net outflows of $194.64 million, marking the largest single-day withdrawal in two weeks. BlackRock’s iShares Bitcoin Trust (IBIT) led the list with redemptions of nearly $113 million, followed by Fidelity’s FBTC, which saw $54.2 million exit.
According to data from Farside Investors, IBIT has now recorded its longest streak of weekly outflows since its launch in January 2024. Over five consecutive weeks leading up to November 28th, more than $2.7 billion flowed out of the fund. Market analysts attribute this trend partly to the unwinding of so-called basis trades—an arbitrage strategy where institutions buy spot Bitcoin ETFs while simultaneously shorting Bitcoin futures. As the spread between futures and spot prices narrowed below profitable levels, these complex positions were closed.
Should investors sell immediately? Or is it worth buying Bitcoin?
High-Profile Criticism Adds to the Gloom
The market encountered additional headwinds from prominent investor Michael Burry. In his first interview in over a decade, Burry—famous for correctly predicting the 2008 financial crisis—drew a comparison between Bitcoin and the 17th-century tulip mania. He stated that Bitcoin is “worth nothing,” advocating instead for gold as a store of value.
His critique arrives at an inopportune moment for Bitcoin bulls. Since reaching an all-time high near $126,000 in October, Bitcoin has declined by roughly 29%. The immediate technical resistance now lies in the $92,000 to $94,000 band, while on the downside, the $88,000 level is viewed as the next key support zone.
A Contradictory Signal from Long-Term Holders
Interestingly, on-chain data presents a more nuanced picture. Analytics firms CryptoQuant and Glassnode report that Bitcoin reserves on exchanges have fallen to around 1.8 million BTC—the lowest level since 2017. This metric suggests that despite short-term price volatility, investors with a long-term horizon continue to accumulate and withdraw coins to private custody, a typically bullish signal for supply dynamics.
All eyes are now turning to the U.S. Federal Reserve’s interest rate decision scheduled for December 10th. An anticipated rate cut of 25 basis points could provide some stability to risk assets. Whether Bitcoin can reclaim the $90,000 mark in the near term will largely depend on a stabilization of sentiment across the broader financial landscape.
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