The cryptocurrency’s attempt to breach the psychologically significant $90,000 level was abruptly halted on Monday. A brief surge above $90,200 during Asian trading hours quickly reversed, with profit-taking pushing the price back down to approximately $87,200. This failure underscores a market dominated by year-end caution, where tax-related selling and a persistent correlation with struggling tech stocks are outweighing continued institutional accumulation.
Institutional Buyers See Opportunity in Dip
Not all market participants are retreating. Major investors, often referred to as “whales,” remain active on the buy side. Strategy, formerly known as MicroStrategy, capitalized on the recent price dip to significantly expand its holdings. Last week, the company purchased an additional 1,229 Bitcoin for about $108.8 million. On-chain data further supports the view that large-scale investors are strategically using price levels around $80,000 for accumulation.
Stock Market Correlation Proves a Persistent Drag
A primary factor capping Bitcoin’s upward momentum is its strengthened linkage to traditional equity markets, particularly the Nasdaq 100. Analysts at Wintermute note that this correlation intensifies during stock market downturns, a dynamic that pulled the crypto sector lower today. The brief rally did trigger a cascade of liquidations, however, wiping out over $102 million in leveraged short positions. This “short squeeze” initially accelerated the price rise before buying pressure evaporated.
Should investors sell immediately? Or is it worth buying Bitcoin?
Year-End Tax Strategies Add Selling Pressure
The prevailing defensive posture among many traders is evident in the declining Open Interest for Bitcoin futures, signaling a reduction in leveraged bets. Market weakness is especially pronounced during U.S. trading hours, which analysts at Laser Digital attribute largely to tax-loss harvesting. Investors are moving to realize losses before the year-end for tax purposes, creating a consistent headwind.
In the near term, technical indicators point to a continuation of volatile, range-bound trading. Experts, including John Glover of Ledn, suggest that a further pullback toward the $71,000 to $84,000 range may present more attractive entry points. For the remainder of the year, the critical level for investors to watch is the defense of the key support zone around $80,000.
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