A Market in the Grip of Bearish Momentum
Bitcoin is currently navigating a significant downturn, having fallen nearly 30% from its October peak of $126,000 to test the crucial $90,000 support level. This decline has erased over $1.2 trillion from the total cryptocurrency market capitalization and pushed the Crypto Fear & Greed Index to a mere 15, signaling “Extreme Fear” among investors, a level of panic not seen since early 2025. The market structure has turned negative, with Bitcoin breaking below key trend channels and its price action indicating a strong bearish trend in both the short and medium term.
The pressure is not just from retail investors. Institutional demand has notably weakened, with U.S. spot Bitcoin ETFs experiencing substantial outflows. Data from November 18-19 shows outflows of $372.77 million in a single day, extending a multi-day streak of withdrawals that has removed a key pillar of buy-side support. This is further confirmed by a negative Bitcoin premium index on major U.S. exchanges, indicating greater selling pressure and capital outflows in the institutional sphere.
The Critical $87.5K Support and Potential Downside
The $87,500 level you’ve highlighted is indeed the decisive battleground for Bitcoin’s short-term direction. Analysts are closely watching this zone, which aligns with the average cost basis of ETF holders at approximately $89,651. A decisive daily close below this support could trigger a deeper correction.
If the $87.5K support fails to hold, the next significant targets lie between $83,800 and $85,000. This range is considered a likely scenario by some analysts, as a decline of a similar magnitude to the March 2024 and Q1 2025 drawdowns would place Bitcoin in this area. A further breakdown could potentially open the path toward the $74,000 level, which aligns with MicroStrategy’s cost basis and served as a significant low in April 2025.
A Glimmer of Hope and Key Reversal Signals
Despite the overwhelming bearish sentiment, several indicators suggest the potential for a stabilization or even a rebound. Some on-chain metrics are flashing oversold signals that have historically preceded market bottoms. Bitcoin’s realized loss margin is at -16%, which is below the -12% threshold typically associated with cyclical lows. Furthermore, the Relative Strength Index (RSI) on the daily chart is hovering in oversold territory, suggesting bearish momentum may be exhausting itself and setting the stage for a potential short-term rebound.
Contrary to the panic, there is evidence of strategic accumulation during this dip. On-chain data reveals that accumulation addresses have increased their net holdings by 42,000 BTC over the past 10 days. This divergence suggests that long-term believers are using the downturn to increase their reserves in cold storage, even as short-term traders exit ETF products. This behavior is a classic sign of a maturing market where “smart money” accumulates during periods of fear.
In summary, Bitcoin stands at a critical technical juncture. The convergence of extreme fear, institutional outflows, and broken technical structures has created a high-risk environment. The defense or breach of the $87,500 support level will be the most critical milestone to watch. A successful hold could pave the way for consolidation and a relief rally, while a breakdown may lead to a swift test of the $83,800 – $85,000 support zone. For traders and investors, this is a time for rigorous risk management and close observation of on-chain accumulation patterns alongside ETF flow data.
