Bitcoin's $90K Support Breached: Institutions Flee, MSTR Stock Plunges

Bitcoin's recent price correction has sparked concerns among traders, with the cryptocurrency dropping below the $90,000 support level for the first time in over three months. This decline has generated a negative sentiment, as indicated by the Crypto Fear & Greed Index, which has shifted from "neutral" and "greed" to "fear" after nearly six months.

Amidst the Bitcoin (BTC) price correction, a new trend has emerged among institutional investors. A five-day streak of net outflows on U.S. based Spot Bitcoin ETFs has raised concerns among traders, leading to speculations about institutional investors giving up on Bitcoin and the potential end of the BTC bull run. To identify the next big Bitcoin trade, we investigate on-chain and technical indicators.

On-chain data from Santiment shows that supply on exchanges is climbing while supply outside of exchanges (held by whale wallets) declines. This indicates that entities holding BTC outside of exchanges are transferring holdings to exchange wallets after weeks of consistent accumulation. Bitcoin accumulation by non-exchange wallets was considered a bullish sign for BTC, so a decline in non-exchange holdings is now seen as an expectation of further decline in Bitcoin's price.

Fund flow data from CoinShares shows that institutions have pulled $595 million from Bitcoin funds month-to-date and $571 million week-to-date. This has dragged down net week flows in crypto, with Bitcoin-based funds seeing outflows while Ethereum, Solana, XRP, and multi-asset funds see inflows. Between February 21 and 25, Bitcoin faced additional selling pressure, pushing BTC price lower under the $90,000 support.

MicroStrategy stock has also tumbled, with analysts at 10x Research explaining the correlation between MSTR and Bitcoin's price trend. Markus Thielen, the CEO of 10x Research, believes that investors viewed MSTR as a leveraged Bitcoin call option and failed to recognize that they were overpaying significantly. The stock traded 60% above its fair value, according to their February 24 report. MSTR buyers are likely sitting on significant losses despite Bitcoin's price remaining flat over the same period. MSTR stock's performance and demand, therefore, influence the sentiment of traders treating it as a leveraged Bitcoin call option. BTC price drop under the $90,0