Bitcoin’s recent downturn has alarmed traders as it slipped below the critical $90,000 support level, currently trading at $86,930. This marks the first time in over three months that BTC has dropped to this range, igniting concerns over a further price correction. Sentiment has shifted towards fear after months of optimism, as reflected in the Crypto Fear & Greed Index.
Institutional Investors Pulling Back
A significant trend emerging amid Bitcoin’s price correction is declining institutional interest. U.S.-based spot Bitcoin ETFs have seen a five-day streak of net outflows, raising concerns about weakening demand. Fund flow data from CoinShares indicates that institutions have withdrawn $595 million from Bitcoin funds in February alone, with a total of $571 million exiting just last week.
Ethereum, Solana, XRP, and multi-asset funds, on the other hand, have continued to attract inflows, suggesting that institutions are reallocating capital away from Bitcoin into other digital assets. This has further contributed to BTC’s price decline and increased selling pressure.
Whales Dumping BTC as Exchange Supply Rises
On-chain data from Santiment highlights a critical shift in Bitcoin’s supply dynamics. The supply of BTC on exchanges has been rising, coinciding with a decrease in holdings by whale wallets—typically a bearish signal. Investors holding Bitcoin in private wallets are moving their assets to exchanges, likely in anticipation of selling. Additionally, transactions from whale accounts (>$100,000 and >$1 million) have steadily declined since early February, signaling reduced accumulation.
Bitcoin’s price previously rallied past $100,000, but as institutional funds exit and large holders take profits, downward pressure on BTC intensifies. Historical trends suggest that declining non-exchange holdings are indicative of an expectation of further price drops.
Key Support Levels and Technical Indicators
With Bitcoin currently trading below $90,000, analysts are eyeing critical support zones for potential rebounds. The three major support levels to watch are:
- S1: $85,072
- S2: $81,500
- S3: $76,900
If BTC fails to hold above these levels, the next major downside target is $70,577—a pre-U.S. election level. A breakdown of this level could trigger further selling, potentially bringing Bitcoin down to $67,476 as traders seek liquidity.
Bitcoin’s price chart also shows an Ascending Broadening Wedge pattern, a formation that often precedes a downside breakout. Markus Thielen, CEO of 10x Research, warns that BTC’s current widening price action suggests an impending correction, though confirmation through volume trends is needed before drawing firm conclusions.
Macroeconomic Uncertainty and Market Sentiment
Beyond technical indicators, macroeconomic factors are contributing to Bitcoin’s volatility. Global instability—ranging from geopolitical tensions involving Ukraine, China, and Gaza to uncertainty around U.S. interest rates and the Trump presidency—is dampening investor confidence.
Dr. Sean Dawson, Head of Research at Derive.xyz, commented on the situation, stating:
“Bitcoin has seen a 4.5% drop in the last 24 hours, most likely due to the continued exodus of institutional funds from major BTC ETFs. Over the past three weeks, more than $900 million in net BTC ETF outflows have been recorded.”
Moreover, the likelihood of BTC reaching $100K by the end of March 28 has dropped to 30%, down from 39% just a day earlier. The probability of Bitcoin hitting $125K by June 27 has also fallen from 19% to 15%, further reflecting heightened uncertainty.
Looking Ahead
While Bitcoin remains in correction mode, there is still room for recovery. Some analysts suggest that positive macroeconomic developments and increased buying pressure could help stabilize the price above $90,000. However, with whale profit-taking and institutional exits, further downside remains a possibility.
Traders are closely monitoring Bitcoin’s movements, particularly the key $85,000 to $81,500 support range. If BTC breaks below this zone, it could pave the way for a deeper decline toward $70,000. Until a decisive trend emerges, heightened volatility is expected in the near term.
