Bitcoin News Today: Bitcoin Breaks Key Averages as Bears Target $70K Amid ETF Outflows and Forced Sales Risk

Bitcoin hovered near $88,000 on December 20, 2025, as traders braced for a technical breakdown after a 30% correction from its October high. The coin had struggled to reclaim key resistance levels, including the $90,000 threshold and the 50-week Exponential Moving Average (EMA). On-chain metrics suggested growing distress among holders.

The drop below $90,000 and the 50-week EMA marked a significant shift in market sentiment, with analysts debating whether the decline signaled the start of a bear market. Technical indicators such as the Supertrend and Fibonacci retracement levels further reinforced bearish conditions, with the next major support level estimated at $70,000.

Meanwhile, macroeconomic factors introduced both risks and opportunities. The Federal Reserve's expected rate cuts and global stimulus measures from countries like Japan and China provided some optimism, though these were weighed against ongoing outflows from Bitcoin ETFs and the potential for major crypto treasury firms to liquidate holdings.

Market Volatility and Technical Concerns

Bitcoin's recent performance underscored the fragility of its short-term momentum. A bearish pennant pattern had formed on the weekly chart, suggesting that a sharp sell-off could be imminent. This pattern, characterized by consolidation between converging trend lines, often preceded a directional breakout. Traders closely monitored whether Bitcoin would break below the $84,000 support level, which could trigger further declines.

The Supertrend indicator, a key tool for traders, had turned bearish, and the price had dropped below the 23.6% Fibonacci retracement level. These technical signs pointed to a potential continuation of the downward trend. The 50% Fibonacci retracement level at $70,000 remained a critical psychological target for bears.

On-chain data added to the bearish narrative. The adjusted Spent Output Profit Ratio (aSOPR) approached 1, indicating that more coins were being sold at a loss than a profit. A reading below 1 historically signaled market capitulation and the end of a bearish phase. At the same time, over 7 million BTC were in loss, nearing thresholds that had previously marked the start of bear market conditions.

Institutional and Regulatory Dynamics

The volatility also posed challenges for digital asset treasury (DAT) companies. As prices fluctuated, firms with large BTC holdings faced pressure to either hold through the downturn or sell to maintain liquidity. Some major players, such as Strategy, had hinted at the possibility of selling if their multiple-to-net-asset-value (mNAV) dipped below 1. While Strategy had sufficient liquidity to manage its obligations, smaller DATs with less capital were more exposed to forced selling.

Regulatory developments, however, offered a counterbalance to the bearish momentum. The U.S. Senate's negotiations on the Clarity Act, which would place Bitcoin under the oversight of the Commodity Futures Trading Commission, were seen as a potential catalyst for broader institutional adoption. Clearer regulatory guidelines could attract new capital to the crypto market and reinforce long-term bullish sentiment.

Analyst Outlook and Market Sentiment

Market participants were divided on the future path of Bitcoin. While some analysts, including Citi's Alex Saunders, maintained a bullish stance, setting a 12-month price target of $143,000 and a potential upside of $189,000, others warned of a further decline to $60,000–$70,000. Pseudonymous analyst Jackis viewed the current correction as a "temporary pause" rather than the beginning of a full bear market. He attributed the drop to the shifting of ownership from long-term holders to institutional investors, rather than a fundamental breakdown in market conditions.

Chris Burniske, formerly of Ark Invest, also echoed this view, noting that a fall to $60,000–$70,000 could mirror past bear regimes but not necessarily confirm a full reversal of the uptrend. The key, he said, would be whether Bitcoin could reclaim the 50-week EMA or the $98,000–$100,000 range, both of which were historically significant for the bull market's continuation.

What Investors Should Watch

For investors, the next few weeks were crucial. The battle between bulls and bears would likely hinge on whether Bitcoin could stabilize above the $84,000 support level or break down further. A sustained move below $80,468 would confirm the bearish narrative, while a rebound above $90,000 could reignite optimism.

ETF outflows remained a key risk factor, as reduced inflows into Bitcoin ETFs weakened the stabilizing bid that had previously absorbed selling pressure. Institutional adoption and regulatory clarity, on the other hand, provided a buffer against prolonged bearish momentum.

In the broader context, the global M2 money supply had hit a record high, and the Federal Reserve's expected rate cuts could provide a tailwind for both Bitcoin and the stock market. However, rising unemployment and uneven job growth suggested that the Fed might proceed cautiously, limiting the extent of its easing measures.

For now, Bitcoin traders remained on edge, waiting for the next major move-whether it be a sharp breakdown or a resilient rebound.