Bitcoin Below $89,000 Could Trigger $1.127 Billion in CEX Long Liquidation Pressure

Bitcoin (BTC) is trading around $90,000 amid heightened volatility in the cryptocurrency market. The decline from BTC's weekly high of $94,789 indicates uncertainty about the sustainability of the early-year rally, which may have triggered profit-taking. Ethereum (ETH) and XRP are also showing signs of increased selling pressure, trimming their early gains.

Spot Exchange Traded Funds (ETFs) for Bitcoin have recorded notable outflows. Bitcoin ETFs saw $486 million in outflows on Wednesday, the highest single-day withdrawals since November 20. This includes nearly $248 million from Fidelity's FBTC and almost $130 million from BlackRock's IBIT.

Ethereum ETFs also experienced outflows, with investors withdrawing $98 million on Wednesday. This follows three consecutive days of inflows totaling $115 million on Tuesday, $168 million on Monday, and $174 million on Friday.

Why Did This Happen?

The current market dynamics suggest a combination of profit-taking and risk aversion among investors. The cumulative inflow for Bitcoin ETFs now stands at $57 billion with net assets averaging $118 billion. However, the desire to offload Bitcoin points to escalating volatility and a lack of key catalysts to sustain the uptrend.

The technical structure of Bitcoin is weak, with the Relative Strength Index (RSI) dropping to the midline at 50 on the daily chart. This indicates a potential consolidation phase before any further directional movement.

How Did Markets Respond?

XRP is also experiencing a downturn, trading down for the third consecutive day. After peaking at $2.41 on Tuesday, XRP has faced aggressive profit-taking, with sellers taking control and attempting to stabilize just above the $2.00 level.

XRP spot ETFs recorded nearly $41 million in outflows on Wednesday, marking the first outflow since their debut in November. The cumulative inflow for XRP ETFs now stands at $1.2 billion with net assets averaging $1.53 billion.

Futures Open Interest (OI) for XRP has also declined, falling to $4.26 billion on Thursday from $5.51 billion the previous day. This sharp decline indicates that retail investors are losing confidence in XRP.

What Are Analysts Watching Next?

If Bitcoin drops below $89,000, the mainstream CEX long liquidation pressure could reach $1.127 billion. This threshold is critical for assessing the immediate risk of further declines and potential market reactions.

The broader crypto market sentiment has shifted decisively into fear, with the Crypto Fear & Greed Index dropping to 28 after failing to sustain a move above 42 on Wednesday. This sudden reversal underscores the loss of bullish momentum and increased caution among investors.

Analysts are also monitoring the potential impact of macroeconomic events, such as the US Federal Reserve's decisions on interest rates. These events influence crypto assets through their direct impact on the US Dollar.

Institutional investors are also watching for signs of a repricing of risk in the market. The 2025 crypto bear market acted as a stress test for institutional entrants waiting to allocate into the emerging industry. This period saw a re-evaluation of risk, with the industry adopting real-time verification and compliant infrastructure.

The current market conditions suggest that liquidity is shifting as crypto assets function more as the backend for global finance. This transition is expected to bring a more stable and institutional-grade environment for investors.