Bitcoin's Struggle at $90k and the Implications for Longs and Shorts

Bitcoin's price action in late 2025 has been defined by a tense standoff at the $90,000 psychological resistance level. Traders and investors are now scrutinizing on-chain metrics to gauge whether this critical threshold will hold-or collapse under the weight of institutional and retail forces. The $90k level, a symbolic milestone in Bitcoin's history, has become a battleground for market structure, with implications that could reshape the risk-reward profile for both longs and shorts in the near term.

On-Chain Dynamics: A Fractured Market Structure

On-chain data reveals a market in flux. According to a report by , Bitcoin entered 2026 with a "cleaner" structure after a major reset, but profit-taking remains subdued, and risk appetite is fragile. Exchange inflows have spiked during sharp price declines, signaling that large holders are preparing to sell or rebalance portfolios. Meanwhile, whale activity is split: some are trimming exposure, while others are selectively buying in the $80k–$90k range.

Wallet distribution metrics further highlight this volatility. FireCharts' CVD (Cumulative Volume Delta) analysis indicates that whales are using TWAP (Time-Weighted Average Price) bots to dollar-cost average within the $87.5k–$89k range, with distinct sell and buy sequences observed. This suggests a deliberate effort to accumulate or distribute at key levels, rather than panic-driven trading.

However, Bitcoin's repeated rejections near $94k have created a defensive tone. Support is now defined around $89.5k and the 21-day moving average. If these levels fail, institutional players and long-term holders may begin liquidating, accelerating downside pressure.

Psychological Resistance: The $90k Ceiling

The $90k level is more than a number-it's a psychological and technical fulcrum. As noted by , Bitcoin has stalled at this level as institutional flows replace the old halving playbook. Repeated failed attempts to break above $90k have turned it into a high-volume distribution area, effectively capping the price.

This resistance is compounded by weak demand across ETFs, spot, and futures markets. Unrealized losses are rising, and ETF outflows have worsened the situation. In the week ending December 28, 2025, U.S. spot Bitcoin ETFs recorded $594.3 million in outflows, a sharp increase compared to prior weeks. While the cumulative ETF stack remains a structural buyer of supply, these outflows suggest year-end risk reduction by institutional investors.

Implications for Longs and Shorts

For longs, the $90k level represents both an opportunity and a risk. If Bitcoin fails to reclaim this level, it could trigger a deeper correction toward $80k, as overhead supply and fading demand limit recovery attempts. However, long-term holders (LTHs) have shown resilience. On-chain indicators reveal a positive turn in the Hodler Net Position Change metric, with wallets holding Bitcoin for over 155 days returning to accumulation after nearly three months of net distribution. This suggests that the current consolidation phase is more about plateauing than bearish capitulation.

Shorts, meanwhile, face a double-edged sword. While the $90k ceiling appears fragile, institutional buyers like Nasdaq-listed Strategy continue to absorb supply. Strategy added 1,229 BTC at an average price of $88,568 in late December 2025, bringing its total holdings to 672,497 BTC-a position valued at $58–59 billion. Such aggressive accumulation by corporate treasuries could create a floor for Bitcoin, limiting short-term downside.

The Fragile Bull Case

Despite the bearish signals, Bitcoin's technical structure isn't entirely broken. On the weekly chart, the price briefly dipped below the 50-week SMA in November 2025 but found support at the 100-week SMA. The monthly chart shows Bitcoin still trading above the 20-month SMA, a level historically associated with bull-market consolidations rather than cycle tops. This implies that a sustained break above $90k could reignite bullish momentum, particularly if ETF inflows stabilize.

However, the mining economics of Bitcoin remain a headwind. Estimated average production costs cluster around $94k per BTC, meaning miners could become net sellers if prices fall further. This dynamic adds another layer of complexity for longs, as miner behavior historically influences short-term price action.

Conclusion: A Tenuous Equilibrium

Bitcoin's struggle at $90k underscores a market caught between institutional caution and retail resilience. On-chain metrics paint a picture of a fractured but not yet broken structure, with whale activity and ETF flows serving as key barometers. For longs, the priority is to monitor whether LTHs and corporate buyers can stabilize the $89.5k support zone. For shorts, the risk lies in overexposure to a potential bounce driven by ETF inflows or TWAP-driven accumulation.

As the market navigates this critical juncture, one thing is clear: the $90k level is not just a number-it's a psychological and structural linchpin that will define Bitcoin's trajectory in early 2026.