Bitcoin News Today: Bitcoin's $88k Drop: Correction or a New Bearish Trend?

Bitcoin plunged below $88,000 in early December, marking a sharp reversal from its recent rebound above $90,000 and signaling renewed risk-off sentiment in the cryptocurrency market. The selloff followed a volatile week that saw the asset surge 4.35% in 24 hours before retreating, driven by shifting macroeconomic expectations and institutional activity. Analysts are now scrutinizing technical indicators and institutional positioning to assess whether the decline represents a short-term correction or a broader bearish trend.

The week began with a significant on-chain event as SpaceX moved 1,163 BTC-valued at over $105 million-to new wallets, sparking speculation about custodial adjustments or potential liquidation strategies. This movement coincided with Tesla's continued Bitcoin holdings of 11,509 BTC, worth $1.05 billion, underscoring institutional exposure to the asset. Meanwhile, BlackRock's Bitcoin ETF holders regained profitability after the price crossed $90,000, with unrealized gains reaching $3.2 billion as of November 27. The recovery was attributed to improved sentiment among institutional investors, who had previously faced losses as Bitcoin fell to monthly lows in late November.

Technical analysis highlighted mixed signals. Bitcoin's 50-day EMA at $100,937 and the 200-day EMA at $105,515 continued to act as overhead resistance, capping rebounds. However, bullish momentum emerged in the form of a 3.35% gain in the broader crypto market, with Ethereum and XRP showing tentative signs of stabilization. Ethereum's relative strength index (RSI) inched toward 41, suggesting narrowing bearish momentum, while XRP's price broke through the $2.20 resistance zone amid institutional inflows tied to new ETFs. Analysts noted that XRP's V-shaped recovery was supported by $164 million in initial inflows from Franklin Templeton's XRPZ and Grayscale's GXRP, signaling renewed confidence in altcoins.

The market's macroeconomic backdrop added complexity. Bitcoin's recent resurgence to $91,230 was fueled in part by growing expectations of a Federal Reserve rate cut in December, with probabilities rising 46% in a week. This dynamic gained urgency as Kevin Hassett, a crypto-friendly economist and Trump ally, emerged as a leading candidate to replace Jerome Powell as Fed Chair. Hassett's dovish stance-advocating for faster rate cuts and a pro-crypto policy framework-has bolstered speculation that the central bank could adopt a more accommodative stance, potentially easing pressure on risk assets. [Futures market data also suggested a "leverage washout"] https://cointelegraph.com/news/bitcoin-significant-step-forward-97k-btc-price-targets-return, where aggressive shorting had stabilized, creating a foundation for a more sustainable rally.

Despite these positives, structural challenges remain. Bitcoin's 24-hour rally faced resistance at $89,000, a level critical to rekindling a push toward $93,000. A breakdown below $86,000 would test a key support zone identified by analyst Lennaert Snyder. On the ETF front, BlackRock's IBIT and other spot Bitcoin ETFs recorded their first inflows in two weeks, though cumulative inflows of $21 million paled in comparison to the $903 million outflows seen earlier in November. The ETF landscape remains pivotal, as these products have historically driven Bitcoin's price action in 2025.

Looking ahead, the market's focus will shift to the Fed's December 10 meeting and the outcome of the Fed Chair nomination process. If Hassett's dovish policies materialize, they could amplify liquidity for risk assets, including Bitcoin, by reducing borrowing costs and encouraging capital rotation out of cash and into equities and crypto. For now, traders are balancing optimism about macroeconomic tailwinds with caution over technical hurdles and institutional positioning.