Bitcoin News Today: Institutional Hesitation Muddies Bitcoin's Post-Correction Outlook

Bitcoin's price has stabilized after a significant correction, trading around $87,700 as of Wednesday, following a 36% decline from its October 6 record high of $126,199 according to analysis. The cryptocurrency's recent volatility has been exacerbated by mixed flows in spot Bitcoin Exchange Traded Funds (ETFs), with institutional investors alternating between inflows and outflows this week. For instance, SoSoValue data showed $128.64 million in inflows on Tuesday, contrasting with $151.08 million on Monday, highlighting cautious sentiment among institutional players.

The market's indecision is further underscored by the performance of Bitcoin relative to traditional assets. Over the past 30 days, Bitcoin has underperformed the Nasdaq index in 21 of 30 trading days, marking the first time since July 2024 that its relative underperformance has exceeded 70%. This divergence has been accompanied by rising correlations with equity indices, with Bitcoin exhibiting deeper drawdowns and weaker recoveries compared to traditional markets. Analysts at K33 Research note that such behavior typically signals aggressive selling pressure during periods of risk aversion.

Despite these challenges, some analysts argue that Bitcoin's current valuation presents a compelling opportunity. The price relative to the QQQ index has fallen to 143, the lowest level since November 5, 2024, as post-U.S. election momentum in Bitcoin has retraced entirely. K33 Research concludes that "BTC's relative pricing to other risk assets is a significant disconnect from its fundamentals," positioning it as a "strong relative buy for long-term investors."

Technical indicators suggest potential for a short-term rebound. The Relative Strength Index (RSI) on the daily chart stands at 32, indicating bearish momentum may be exhausting, while the MACD histogram shows declining red bars, hinting at a possible crossover above the signal line according to technical analysis. If Bitcoin breaks above $90,000, it could test key resistance levels, though a continuation of the decline toward $80,000 remains a risk.

The broader crypto ecosystem has also seen regulatory developments that could reshape market dynamics. The SEC's revised 2025 agenda aims to streamline oversight, potentially fostering more consistent global standards for stablecoins and tokenization. Meanwhile, Nasdaq ISE has proposed lifting position limits on BlackRock's IBIT options, aligning them with commodity-based ETFs like the SPDR Gold Trust (GLD). These moves reflect growing institutional interest in crypto derivatives, though challenges persist, as evidenced by lawsuits against Binance for alleged failures to report transactions involving sanctioned entities like Hamas according to legal filings.