Bitcoin Price Forecast: BTC struggles below $90,000 as ETF outflows persist and options expiry looms
- Bitcoin hovers around $87,700 after failing to break the $90,000 resistance this week.
- US-listed spot ETFs record an outflow of $175.29 million on Wednesday, marking the fifth consecutive day of withdrawals.
- Market volatility remains high, with nearly $23.47 billion in BTC options expiring Friday, which could trigger sharp price swings.
Bitcoin (BTC) steadies around $87,700 at the time of writing on Thursday after failing to reclaim a key psychological level earlier this week. Institutional demand continues to weaken as spot Bitcoin Exchange-Traded Funds (ETFs) recorded their fifth consecutive day of withdrawals. Traders should remain cautious ahead of Friday’s large options expiry, which could bring fresh volatility and direction to the largest cryptocurrency by market capitalization.
Bitcoin’s institutional demand continues to fade
Institutional demand has continued to weaken so far this week. SoSoValue data show that Spot Bitcoin ETFs recorded an outflow of $175.29 million on Wednesday, marking the fifth consecutive day of withdrawals since December 18. If these outflows continue and intensify, the Bitcoin price could see further correction.
Calm before the storm
Derbit data shows that on Friday, $23.47 billion in BTC option contracts are set to expire. BTC derivatives traders are positioning heavily around higher strike prices, with call open interest significantly outweighing puts, as indicated by the low put/call ratio of 0.35, signalling a broadly bullish bias.
In addition, the max pain price of $95,000 suggests that option sellers would benefit most if BTC gravitates toward this level by expiry, as the most contracts would expire worthless there.
QCP Capital’s report this week highlighted that although leveraged positioning has come down, the contraction in market depth means squeeze risk in either direction remains elevated.
“Historically, BTC has tended to experience 5 to 7% swings during the Christmas period, a pattern often linked to year-end options expiries rather than fresh fundamental catalysts,” said QCP’s analyst.
Bitcoin Price Forecast: BTC steadies after rejection from key resistance
Bitcoin price was retested at the psychological $90,000 level on Monday and declined slightly the following day. On Wednesday, BTC stabilized at around $87,000. As of Thursday, BTC hovers around $87,700.
If BTC continues its correction, it could extend the decline toward the key support at $85,569.
The Relative Strength Index (RSI) is 43, below its neutral level of 50, indicating that bearish momentum is gaining traction. The Moving Average Convergence Divergence indicator showed a bullish crossover last week; however, the falling green histogram bars indicate fading bullish momentum.
On the other hand, if BTC closes above the $90,000, it could extend the recovery toward the next resistance at $94,253.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
Author
Manish Chhetri
FXStreet
Manish Chhetri is a crypto specialist with over four years of experience in the cryptocurrency industry.
