Bitcoin risks deeper correction as ETFs outflow
Bitcoin (BTC) remains under pressure, trading below $87,000 on Wednesday and approaching a key support level at $85,569. A firm daily close below this zone could open the door to a deeper correction toward the psychological $80,000 level. The bearish outlook is reinforced by a second consecutive day of outflows from spot Bitcoin Exchange Traded Funds (ETFs), while wallets linked to Matrixport moved 4,000 BTC onto centralized exchanges. Meanwhile, derivative traders remain idle, signaling weak conviction and a lack of near-term catalysts for recovery.
Institutional sentiment started the week on a negative note. According to SoSoValue, spot Bitcoin ETFs saw $277.09 million in outflows on Tuesday, marking the second straight day of withdrawals. If this trend continues, it could accelerate the downside move in BTC.
Additionally, Lookonchain data revealed that two wallets associated with Matrixport deposited 4,000 BTC—worth approximately $347.56 million—into Binance on Wednesday. Such large transfers to centralized exchanges often signal intent to sell or redistribute, which can trigger bearish sentiment as market participants anticipate increased supply.
A report from K33 Research published Tuesday noted that traders on the Chicago Mercantile Exchange (CME) remained passive last week. Open Interest (OI) hovered near annual lows at 124,000 BTC, and futures premiums remained compressed. Traders appear reluctant to add BTC exposure, especially as the asset continues to underperform relative to equities and the year draws to a close.
The sluggish performance has also led to fresh outflows from leveraged Bitcoin ETFs, with BITX exposure dropping below 35,000 BTC at the monthly open. The current environment reflects institutional apathy rather than panic, with BTC entering a consolidation phase as major players await a clear catalyst before re-engaging.
Bitcoin price was rejected from a descending trendline connecting multiple highs since early October and has declined nearly 7% since Friday, retesting the $85,569 support level on Monday. BTC rebounded slightly on Tuesday, hovering around $86,700 at the time of writing.
A daily close below $85,569, which aligns with the 78.6% Fibonacci retracement, could extend the decline toward $80,000. The Relative Strength Index (RSI) on the daily chart is at 39, below the neutral 50 level, indicating growing bearish momentum. The Moving Average Convergence Divergence (MACD) lines are converging, and a bearish crossover would further support the downside scenario.
If BTC manages to recover, it could aim for the 61.8% Fibonacci retracement level at $94,253.