Bitcoin News Today: Bitcoin Slumps as Whale Selling Pressures $85K Support Amid ETF Outflows

Bitcoin's market dynamics are undergoing a transformation as new whale activity reshapes the landscape. A surge in selling by long-term holders has intensified bearish sentiment, with approximately 36,500 BTC offloaded, according to recent data. This activity contrasts with the bullish expectations of Grayscale and others who forecast a new all-time high within six months. Meanwhile, market fragmentation is costing tokenized assets up to $1.3 billion annually, according to a report by RWA.io.

Institutional investors and major players are responding to this shift in momentum. Michael Saylor's MicroStrategy added $980 million worth of Bitcoin in early December, reinforcing a long-term conviction in the asset. At the same time, Bitcoin ETFs have seen over $5.2 billion in outflows since October, signaling a cooling in immediate demand.

Technical indicators also show a fragile balance. Bitcoin currently hovers near $85,000, just above key support levels. A break below $81,000 would increase the likelihood of a decline toward $73,300–$74,000, a level associated with potential institutional re-accumulation. The 20-day EMA has started to turn downward, and the RSI is in negative territory, highlighting bearish control over the short term.

How Markets Reacted

Bitcoin's recent volatility has pushed traditional safe-haven assets such as gold and silver to record territory as investors seek stability. The broader cryptocurrency market has followed BTC's lead, with major altcoins like Ethereum, XRP, and Solana trading near multi-month lows. This de-risking trend underscores a shift in portfolio construction, with market participants prioritizing stability over high-risk, high-reward investments.

The bearish sentiment is compounded by a decline in market depth. Kaiko data shows a 30% drop in market depth from earlier in the year, indicating reduced ability to absorb large trades without significant price swings. This metric has become a key concern for traders and institutional investors assessing Bitcoin's liquidity profile.

What Analysts Are Watching

Analysts are closely monitoring whale activity and its impact on price stability. Long-term holders have increased selling by over 130%, contributing to ongoing pressure on Bitcoin's price. This trend is particularly concerning given that the market had previously rallied on regulatory clarity and the approval of spot Bitcoin ETFs.

One analyst highlighted the role of old whales in dampening momentum, noting that while the industry achieved key regulatory milestones, Bitcoin's price failed to follow suit. On the other hand, some market participants remain optimistic, with Grayscale predicting structural shifts in digital asset investing that could drive Bitcoin to new heights in 2026.

Risks to the Outlook

The market faces several risks that could hinder Bitcoin's recovery. Regulatory uncertainty continues to loom, with some jurisdictions imposing restrictive measures on decentralized platforms. While operators like JACKBIT have adapted by offering no-KYC protocols and robust AML standards, the broader ecosystem remains sensitive to policy changes.

Additionally, fragmentation across blockchain networks is creating inefficiencies that impact tokenized assets. According to RWA.io, identical assets often trade at different prices across chains, with capital movement between non-interoperable networks resulting in losses of 2%–5% per transaction. These frictions are estimated to cost the market between $600 million and $1.3 billion annually.

Bitcoin also faces headwinds from macroeconomic conditions. High real yields and fading risk appetite have shifted investor focus toward traditional havens. This environment complicates the case for Bitcoin as a store of value, especially as spot ETF outflows continue to challenge bullish momentum.

What This Means for Investors

Investors are advised to take a measured approach to Bitcoin given the current market dynamics. A strategic stance of "Hold with a clear accumulation bias" is recommended, particularly in the event of a deeper correction into the $73,000–$74,000 range. This price level is historically attractive for long-term accumulation and could trigger a rebound if supported by institutional buying.

For those who remain bullish, Grayscale's forecast offers a timeline for potential upside, but it also underscores the importance of patience. The market is in a consolidation phase, with volatility likely to persist before a clear trend emerges.

In the short term, the focus should remain on key technical levels and whale activity. A reclaim of the $94,000 threshold would signal a return to the structural uptrend and could justify a shift toward a more aggressive bullish stance. Investors should also monitor regulatory developments and fragmentation trends, as these factors will continue to shape the broader cryptocurrency landscape.