- Bitcoin’s $90,000 Support Remains Strong After December Selloff, Signaling Underlying Market Resilience
- Institutional profit-taking has cooled, with Bitcoin ETF inflows falling from $14 billion to $6.6 billion per month
Seasonal variations have never been kind to Bitcoin (BTC) at the end of December. The sell-side avalanche tends to spill over in January, and 2025 is no exception. Institutional profit-taking has taken a toll, with open interest on CME contracts down 13%. ETFs, too, have seen their net flows cool, from $14 billion a month to $6.6 billion, as institutions lock in profits.
Despite this, Bitcoin has held firm around the critical $90,000 support. December’s punishing selling pressure — $200 million in daily outflows — has eased, leaving January hovering on the neutral line. Resilience hints at underlying strength, but is it enough for Bitcoin to defy the odds?
$90,000 support holds
After a volatile December marked by relentless sell-side pressure and daily outflows topping $200 million, the market entered January with renewed stability. The critical $90,000 support level, shaped by institutional inflows, is now a sign of resilience amid easing volatility.
Source: Cryptoquant
At press time, Open Interest, down 13% since peaking in November, showed a wave of profit-taking among institutional investors. The sharp decline in contracts nearing expiration in late December correlated with selling, signaling risk aversion as market uncertainty escalated.
Additionally, the tapering of longer maturities indicated cautious sentiment that extended beyond the immediate term. This slowdown in activity meant that institutions are hedging their positions rather than aggressively pursuing upside bets.
Bitcoin’s price suggested that the $90,000 level has become a psychological anchor. A break below this threshold could trigger renewed sell-side momentum, but its current resilience suggests support from both institutional hedgers and retail participants. Although outflows have slowed, cautious optimism has yet to translate into significant upside momentum, keeping the market in a delicate balance.
Key indicators: MVRV and sell-side risk ratio
Source: Glassnode
The STH MVRV relationship revealed an intriguing dynamic. Short-term holders, whose cost basis averages around $88,000, have yet to feel the pinch of unmanageable losses.
But the gap between 1.08 and 1 reflects a delicate equilibrium – one that could turn bearish Bitcoin breaching its support at $90,000. On the contrary, closing this gap could act as a springboard for upward momentum.
Source: Glassnode
The sell-side Risk Ratio chart reinforced Bitcoin’s uncertain positioning. Historically, elevated sell-side risk has correlated with increased volatility and bearish sentiment, particularly during periods of institutional profit-taking. The latest decline in the ratio is consistent with the tapering outflows observed in January – a sign of diminishing selling pressure.
However, the proximity to the lower threshold showed Bitcoin’s susceptibility to further downside if support at $90,000 weakens. Conversely, sustained resilience can inspire renewed bullish activity, driven by short-term holders narrowing their cost gap.
Is Bitcoin Awaiting a Catalyst?
Bitcoin appears to be in a holding pattern, crossing support, waiting for a decisive push. Macro catalysts – such as economic data, monetary policy changes or institutional announcements – can dictate the next steps.
The STH MVRV ratio suggested that short-term holders are close to their cost base, leaving room for a bullish catalyst to push Bitcoin above $90,000. At the same time, the risk ratio on the sell side suggested that selling pressure is easing. Still, Bitcoin remain vulnerable if demand is not realized soon.
Investor behavior remains cautiously optimistic. Stock market inflows and outflows hovering around $12 billion daily offer a baseline of liquidity, but Spot ETFs lack the momentum to drive a breakout.
Currently, Bitcoin is walking a fine line. Whether it dips towards $88,000 to restore market sentiment or finds fresh demand to scale higher, the coming weeks are crucial in defining its direction.
