Bitcoin falls below $90,000: Signal of institutional withdrawal or short-term correction?

Bitcoin fell below the $90,000 mark early Thursday, triggering intense market volatility in a short period. According to data, over $100 million in long positions were liquidated in the past hour, with a total decline of approximately 2.65-3% over the last 24 hours. More notably, the US spot Bitcoin ETF recorded a net outflow of $486 million on Wednesday, marking the largest single-day redemption since November 20. Behind these data points, it reflects a phased withdrawal of institutional funds and a rapid shift in market sentiment.

Capital Pressure and Downward Price Pressure

According to the latest news, the capital flow of the US spot Bitcoin ETF has turned negative for consecutive days. On Tuesday, there was a net outflow of $243 million, which further expanded to $486 million on Wednesday—an unprecedented scale in nearly two months. In comparison, Bitcoin’s strong performance earlier this year (rebounding close to $94,000) was mainly driven by continuous net inflows into ETFs. Now, the reverse flow of funds is directly impacting price support.

From the market performance perspective, the price trend is highly synchronized with ETF capital changes, indicating that institutional fund movements are becoming the dominant short-term factor. The over $100 million liquidation within an hour further amplifies downward pressure, and the risk of leverage market liquidations cannot be ignored.

On-Chain Demand Insufficient, Lack of Support for $100,000 Breakthrough

CryptoQuant analyst Cauê Oliveira offers a relatively cautious assessment. He points out that on-chain demand has not yet shown a substantial recovery; activity remains insufficient to support Bitcoin’s effective push through the $100,000 mark. Against the backdrop of complex market sentiment and low trading volume, on-chain transaction demand has not improved significantly.

This view is critical because it exposes a problem: current Bitcoin rallies rely more on capital flows rather than fundamental support. Once institutional funds start to withdraw, the lack of genuine demand support can lead to rapid retracement.

Market Divergence and Key Points to Watch

Interestingly, there is a clear divergence in market opinions regarding the core drivers behind Bitcoin’s previous rebound to $94,000.

One view suggests that geopolitical factors (such as the situation related to Venezuela) may drive international oil prices lower, indirectly reducing inflation pressures and Bitcoin mining costs, which could be beneficial for Bitcoin’s fundamentals in the medium to long term. However, Ryan Rasmussen, head of research at Bitwise, holds a more direct view—believing that Wall Street’s explanation for Bitcoin’s rise is incorrect, and that the real drivers are institutional adoption, regulatory shifts in crypto, and a rebound in risk appetite.

This divergence highlights the current lack of a clear consensus in the market. Oliveira added that as holiday effects gradually fade, some investors may return to the market. Whether trading activity and genuine demand will rebound at that time will be key indicators to watch for Bitcoin’s future trajectory.

In other words, the focus should be on three signals: whether ETF capital flows can stabilize, whether trading activity can recover, and whether on-chain demand can improve. Any substantial improvement in any of these three indicators could change the current weak trend.

Summary

Bitcoin dropping below $90,000 is not an isolated event but the result of combined effects from capital flows, sentiment, and fundamentals. The significant ETF outflows are the most direct signal, indicating phased institutional withdrawal. The insufficient on-chain demand reveals underlying fundamental weakness. Currently, market opinions on the future trend are divided, which also reflects a lack of market consensus. In the next one or two weeks, as holiday effects fade and trading activity recovers, it will be a critical window to test whether Bitcoin can hold steady at $90,000 and potentially push toward $100,000.