Key Points
- Bitcoin maintains a strong $90k support despite December sell-offs and institutional profit-taking.
- Despite a decrease in Bitcoin ETF inflows, Bitcoin’s resilience indicates underlying market strength.
Despite the traditionally challenging seasonality of late December for Bitcoin (BTC), the cryptocurrency has demonstrated resilience by maintaining a strong $90,000 support.
Institutional profit-taking has seen Open Interest on CME contracts slide by 13%, and ETF inflows have cooled off from $14 billion monthly to $6.6 billion. However, Bitcoin has held its ground around the critical $90,000 support.
$90,000 Support Remains Steady
After a tumultuous December with daily outflows peaking at $200 million, January has brought about a renewed stability for Bitcoin. The critical $90,000-support level, bolstered by institutional inflows, is now a sign of resilience amid declining volatility.
Open Interest, which has dropped by 13% since its November peak, indicates a wave of profit-taking among institutional investors. This reduction in contracts nearing expiry throughout late December aligns with the sell-off, signaling risk aversion as market uncertainty escalated.
Significant Indicators: MVRV and Sell-Side Risk Ratio
The STH MVRV ratio, which reveals that short-term holders’ cost basis averages around $88,000, indicates that these investors have yet to experience significant losses.
The Sell-side Risk Ratio chart, on the other hand, underscores Bitcoin’s precarious positioning. Historically, an elevated sell-side risk has correlated with increased volatility and bearish sentiment, especially during periods of institutional profit-taking.
Bitcoin currently appears to be in a holding pattern, maintaining support while awaiting a decisive catalyst. Economic data, monetary policy shifts, or institutional announcements could dictate its next move.
Investor behavior remains cautiously optimistic. Exchange inflows and outflows hovering around $12 billion daily offer a baseline of liquidity, but Spot ETFs lack the momentum to drive a breakout.
Whether Bitcoin dips towards $88k to reset market sentiment or finds fresh demand to scale higher, the coming weeks will be critical for defining its direction.