Bitcoin News Today: Bitcoin Slumps Below Key Support as ETF Outflows and Bearish Metrics Deepen Downtrend

Bitcoin is facing a bearish correction, with price slipping below key support levels and technical indicators signaling deepening downside risk. Institutional investors are pulling back, as evidenced by recent outflows from spot Bitcoin ETFs. CryptoQuant, a leading onchain analytics firm, has flagged the onset of a bear market and warns that prices could drop as low as $70,000.

The cryptocurrency is currently trading near $85,000, having retraced from a recent peak of $126,219. Technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both bearish, reinforcing concerns about a potential breakdown. If BTC closes below $85,569, it could extend the decline toward the critical psychological level of $80,000.

Analysts are also closely monitoring the 61.8% Fibonacci retracement level at $94,253, which has acted as a key resistance zone in past price action. A recovery above this level could trigger a rebound, but sustained momentum remains elusive amid macroeconomic uncertainty and shifting investor sentiment.

Why the Standoff Happened

The bearish shift is being driven by a combination of weakening institutional demand and broader macroeconomic factors. U.S. spot Bitcoin ETFs have seen significant outflows in recent weeks, with net redemptions exceeding $350 million in a single day. This reflects growing caution among investors ahead of key central bank decisions and U.S. economic data releases.

On the institutional side, large holders have ramped up net distribution, with whales offloading nearly 36,500 BTC in December alone. Additionally, stablecoin inflows have slowed to about half their August pace, indicating a reduction in liquidity and speculative activity.

What Analysts Are Watching

CryptoQuant has highlighted several key metrics that point to an ongoing bear market transition. Funding rates in perpetual futures have fallen to their lowest levels since late 2023, signaling reduced risk appetite among traders. Meanwhile, Bitcoin's price has broken below its 365-day moving average, a critical long-term indicator that historically separates bull and bear market conditions.

Technical analysts are also watching the 78.6% Fibonacci retracement level at $85,569 as a near-term support line. If BTC retests this level and holds, it could stabilize the market and provide a foundation for a potential rebound. A breakdown below this level would likely trigger stop-loss orders and further test support near $70,000.

Risks to the Outlook

Despite the bearish indicators, some analysts remain cautiously optimistic about a potential recovery. The Federal Reserve has injected liquidity into financial markets through bond purchases and reinvestments in Treasury bills, which could boost risk-on sentiment. Additionally, three rate cuts have already been delivered in 2025, with further easing expected if inflation data continues to soften.

However, the current market environment remains fragile. Until Bitcoin can close above $88,200 and retest the $92,000–$94,000 range, the bearish bias is likely to persist.

What This Means for Investors

Investors are advised to remain cautious as the market navigates this bearish phase. Historical patterns suggest that Bitcoin could stabilize near its realized price of $56,000, with $70,000 serving as an intermediate support level. This would represent a drawdown of roughly 55% from the recent all-time high, but it could also mark the shallowest bear market decline on record.

For now, the focus is on whether Bitcoin can defend the 2-Year SMA and neutralize the death-cross signal. If it fails, the risk of a deeper correction into 2026 will increase. However, if macroeconomic conditions improve and liquidity injections continue, the path for a sustained recovery could open.