Bitcoin at a Crossroads: Can Bulls Defend the 100-Week SMA Amid MicroStrategy's Downfall?

Bitcoin's price action in late 2025 has painted a complex picture of market dynamics, with bulls and bears locked in a tug-of-war around the 100-week simple moving average (SMA). At $93,000, Bitcoin currently trades slightly below this critical technical level, a bearish signal in the short term. However, early signs of buyer dominance and institutional shifts suggest the market may be at a pivotal inflection point. Meanwhile, the collapse of MicroStrategy's stock-a once-vaunted proxy for Bitcoin-has further muddied the waters, raising questions about whether institutional confidence in crypto remains intact.

Technical Analysis: A Fragile Bullish Case

Bitcoin's proximity to the 100-week SMA, a long-term trendline often used by investors to gauge market sentiment, remains a key focal point. As of late 2025, the price has tested this level multiple times without breaking above it, remaining trapped in a $88,000–$93,000 range. This sideways consolidation reflects a market in equilibrium, where neither bulls nor bears have secured a decisive advantage.

The Relative Strength Index (RSI) has crossed above the 50 threshold, signaling a potential shift in momentum. However, the oscillator remains within a neutral-to-bearish range, constrained by key resistance levels at $90,000 and $90,500. The Moving Average Convergence Divergence (MACD) histogram, meanwhile, is flattening, suggesting weakening bearish pressure. This divergence between price and momentum indicators-a classic sign of market indecision-underscores the fragility of the current setup.

On-chain metrics reinforce this narrative. Short-term holders continue to hold 75% of their Bitcoin at a loss, creating persistent selling pressure. The 90-day Spot Taker CVD has flipped to a Taker Buy Dominant status, indicating aggressive buying activity in the spot market. Yet, this buyer dominance has not translated into a sustained breakout, as the price remains anchored by a bearish trend line on the hourly chart.

Institutional Sentiment: MicroStrategy's Downfall and the Erosion of Confidence

The collapse of MicroStrategy's stock price-down over 60% from its peak of $457 to $160 as of December 2025-has become a barometer for institutional sentiment toward Bitcoin. Once hailed as a "Bitcoin ETF in disguise," MicroStrategy's aggressive leverage strategy to accumulate 649,870 bitcoins has come under intense scrutiny. The company's stock has lost favor with major institutional investors, including BlackRock, Vanguard, and Fidelity, which collectively reduced their holdings by $5.4 billion in Q3 2025.

This divestment reflects a broader re-evaluation of Bitcoin exposure. Institutions are increasingly favoring regulated vehicles like spot Bitcoin ETPs over leveraged corporate holdings. The rise of these alternatives has eroded MicroStrategy's perceived scarcity premium, as investors seek lower-cost, less volatile avenues to gain Bitcoin exposure.

Compounding the issue is the looming threat of MicroStrategy's potential exclusion from major indices like MSCI and Nasdaq 100. If implemented, this could trigger $8.8 billion in passive outflows, further pressuring both MSTR and Bitcoin prices. Such a scenario would not only amplify short-term volatility but also test the resilience of Bitcoin's price action near the 100-week SMA.

The Crossroads: Technical Resilience vs. Institutional Distrust

The interplay between technical indicators and institutional sentiment creates a paradox. On one hand, Bitcoin's on-chain metrics and oscillator readings suggest a market primed for a breakout. The flattening MACD histogram and Taker Buy Dominant status imply that buyers are stepping in, even if price action remains range-bound. On the other hand, the exodus of institutional capital from MicroStrategy-a company whose stock had once traded at a 10x premium to its Bitcoin holdings-signals a loss of confidence in the broader crypto ecosystem.

This tension raises a critical question: Can Bitcoin's bulls defend the 100-week SMA without institutional support? Historically, institutional adoption has been a key driver of Bitcoin's price discovery. With 86% of institutional investors now either holding or planning to allocate to digital assets, the market's long-term fundamentals remain intact. However, the immediate outlook is clouded by short-term macroeconomic headwinds, including rising real interest rates and the fragility of STHs.

Conclusion: A Test of Conviction

Bitcoin's ability to hold the 100-week SMA will likely hinge on two factors: the emergence of stronger bullish signals and the stabilization of institutional sentiment. Technically, a breakout above $90,500 could reignite buying momentum, particularly if the RSI and MACD align with higher prices. Institutionally, the market will need to see a reversal in the flight from leveraged Bitcoin proxies like MicroStrategy.

For now, the market remains in a holding pattern. Bulls must contend with a fragile on-chain environment and a bearish trend line, while bears face the risk of trend exhaustion and unexpected buyer aggression. As the year draws to a close, all eyes will be on whether Bitcoin can muster the conviction to reclaim its long-term trendline-or succumb to the gravitational pull of macroeconomic reality.