Bitcoin remains above $90,000 as retail selling deepens, year-end risks spur downside hedging

Bitcoin is holding a fragile zone around the low-$90,000s as retail capitulation, heavy ETF outflows, and rising downside hedging pressure continue to define market structure into the end of the year, according to analyst notes shared with The Block.

The largest cryptocurrency traded flat above $91,300 after another defensive daily close, with fear gauges sitting at extreme levels and liquidity conditions across spot markets deteriorating.

Analysts say the tape now reflects a lopsided flow regime — heavy selling from short-term holders and Wall Street investors versus measured, steady accumulation from long-duration wallets or whales, as they’re commonly called.

Timothy Misir, head of research at BRN, said bitcoin is sitting at a “crossroad” as large holders add exposure while retail and short-term buyers continue to realize steep losses. Roughly 31,800 BTC were recently moved to exchanges at a loss, Misir noted, while the number of wallets holding more than 1,000 BTC has climbed 2.2% — the highest pace in four months.

That rotation is occurring against persistent ETF outflows. U.S. spot bitcoin ETFs saw $373 million in redemptions on Tuesday. Notably, BlackRock's iShares Bitcoin Trust (IBIT) logged its largest daily net outflow since its January 2024 debut.

Meanwhile, ether and solana vehicles posted $74 million in outflows and $30 million in inflows, respectively. Misir argued that the absence of institutional absorption for BTC and ETH has magnified the fallout from market-wide deleveraging, leaving bitcoin tethered to a narrow band around $90,000.

Elusive macro clarity

At the same time, the macro backdrop is adding two-way volatility rather than support.

Federal Reserve Governor Christopher Waller signaled openness to a 25-basis-point rate cut in December, but diverging views across the FOMC have left traders without a clear direction of travel for policy.

BRN’s Misir said the market is now positioned for sharp reactions to any incoming data, with both easing and delay scenarios “live” going into the final six weeks of the year. “Any fresh macro surprise could quickly flip positioning and trigger outsized crypto volatility,” he wrote.

Defensive options posture

The options market is reinforcing the downside bias. According to Dr. Sean Dawson, head of research at Derive.xyz, both short-term and long-term volatility have surged in tandem over the past two weeks, marking what he described as a “new volatility regime.”

Thirty-day implied volatility has risen from 41% to 49%, while six-month volatility lifted from 46% to 49% over the same period. Dawson said that the parallel move is notable because long-tenor volatility typically rises more slowly unless traders are hedging sustained, macro-driven uncertainty.

Put-side demand is also climbing. The 30-day 25-delta put skew has fallen from –2.9% to –5.3%, indicating traders are paying more for downside protection. Additionally, December 26 expiries have built a sizable cluster of put open interest around the $80,000 strike.

Options pricing now implies only a 30% chance that bitcoin finishes 2025 above $100,000 and a 50% probability that it ends this year below $90,000. Ether markets mirror the same posture, with traders assigning a 50% probability that ETH ends the year under $2.9K.

“The macro backdrop simply isn’t giving traders a reason to stay bullish into the close of the year,” Dawson said.

Structure remains intact despite end-of-cycle fears

The latest update from 21Shares argued that current conditions resemble a short-term reset rather than a full cycle break. Analysts believe there is more upside ahead despite bitcoin’s drop below $100,000 and its 27% drawdown from the peak.

In a Nov. 18 note, the firm cited a mix of forced liquidations — nearly $4 billion in long positions were wiped out this week — thin spot liquidity, and a liquidity vacuum tied to U.S. fiscal dynamics as the primary accelerants behind the latest leg down.

Polygon-based prediction market Polymarket's markets now assign a 30% chance that bitcoin hits $85,000 by year-end. Crucially, 21Shares said structural fundamentals remain intact. Selling pressure from long-term holders has slowed, and assets are rotating into “stickier” hands, the company’s team wrote.

They also surmised that global liquidity is set to improve following the end of the U.S. government shutdown and that institutional capital flows should strengthen as macroeconomic conditions improve.

Historically, drawdowns of this magnitude have marked consolidation phases before the next leg higher, the firm added, noting that BTC’s momentum indicator is now at its weakest level since the FTX collapse — without any comparable systemic stress event.

The firm outlined $98,000-$100,000 as the primary resistance band and $85K as the first major support, with a deeper pocket of demand expected around $75,000-$80,000 if the lower level breaks.

“We have entered the downside scenario we outlined,” 21Shares wrote. “But the cycle structure remains intact. If liquidity normalizes and bitcoin regains the $100K level, the broader uptrend can resume.”

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