Bitcoin News Today: Bitcoin Plunges Into Bear Regime as Derivatives Overshadow Spot Demand

Bitcoin's price structure has turned bearish as key market indicators show deteriorating conditions for bulls, with derivatives markets gaining dominance over spot demand. The Structure Shift composite indicator, which measures Bitcoin's market structure on a -1 to +1 scale, has dropped to -0.5, signaling a shift into bearish territory. This decline coincides with Bitcoin trading at the lower boundary of its 21-day Donchian Channel, reinforcing the bearish signal.

The Bull-Bear Index further confirms the negative shift, showing the bullish component near 5% while the fast bearish component has turned negative. This suggests short-term derivatives positioning is overpowering weak spot buyer activity, signaling an imbalance in the market's direction. Bitcoin's price has fallen to around $86–87,000, down roughly 3–4% in the last 24 hours, with trading volume hovering in the mid-$30 to $40 billion range.

Market activity remains weak, with BTC trading closer to the lower half of its 24-hour range and derivatives data reflecting negative short-term performance. A red 24-hour return on major dashboards aligns with a risk-off session in an already soft regime. Analysts at Adler AM attribute the bearish structure to fading spot demand and rising pressure from derivatives markets, which have pushed the asset into a bear-leaning regime.

Why the Market Shifted

The shift into bearish territory is confirmed by the combination of the composite structure signal and the Bull-Bear regime dynamics. The Structure Shift indicator's decline to -0.5 suggests bears have seized control, as the price now trades near channel support. Additionally, the Bull-Bear Index shows that short-term momentum favors bearish positioning, with spot demand insufficient to counter futures market pressure.

Bitcoin's position at the lower boundary of the 21-day Donchian Channel adds further bearish weight. Technical indicators such as the exponential moving averages (EMAs) are trending downward, reinforcing a bearish bias. The 50-day EMA at $94,829, the 100-day EMA at $100,415, and the 200-day EMA at $102,702 all suggest a continued downtrend. A regime flip back to risk-on would require the composite signal to rise above zero and the bullish component to exceed 5%, but for now, the indicators remain in bearish control.

Risks to the Outlook

The bearish signal is reinforced by weak trading volumes and outflows from major Bitcoin and Ethereum spot ETFs. Institutional investors have pulled $582.4 million from Bitcoin and Ethereum ETFs over the last two days, with Bitcoin ETFs alone seeing $277 million in outflows on Monday and another $358 million on Tuesday. Ethereum ETFs also recorded $224 million in outflows, with BlackRock's ETHA ETF leading the exodus.

The macroeconomic environment has also contributed to the risk-off sentiment. The Federal Reserve's December rate cut, while a short-term relief, came with a hawkish tone that has kept market participants cautious. Futures markets now price a 73% chance of unchanged rates at the January 28 FOMC meeting, and a 47.6% probability of no change at the March 18 meeting. This uncertainty has led to a sell-the-bounce environment, where dip-buying has not materialized, and selling pressure continues to mount.

A break of key support levels could accelerate a deeper correction. Bitcoin currently trades near $86,000, and a retest of $80,600—a level previously tested on November 21—could signal a deeper bearish phase. Traders are watching for the blue MACD line to cross below the red signal line to confirm a sell signal and confirm a continuation of the downtrend.

What This Means for Investors

Investors should remain cautious as the bearish structure deepens. Bitcoin's current position near channel support suggests limited upside in the short term. Until the composite structure signal returns to positive territory and the Bull-Bear Index shows a recovery in the bullish component, the asset is likely to remain in a risk-off, bear-leaning regime.

Retail investors may look to ETFs for exposure, particularly in XRP, which continues to see inflows despite the broader market decline. XRP ETFs have recorded $1.01 billion in cumulative inflows, with no outflows since their debut in November. However, institutional outflows from Bitcoin and Ethereum ETFs suggest a broader lack of confidence in crypto's near-term outlook.

For the market to recover, a return to risk-on sentiment will be necessary. This requires not only a reversal in the composite signal but also stronger spot demand to offset the current derivatives-driven bearish pressure. Until that shift occurs, Bitcoin remains vulnerable to further corrections amid a weak market environment.