Bitcoin’s Bullish Sentiment Falters Amid Key Technical and Macro Tests

Bitcoin continues to struggle with the $90,000 threshold. While the price decline has been modest, a notable shift toward negative sentiment is sweeping the market. The critical question now is whether a combination of waning risk appetite, mixed ETF flows, and upcoming macroeconomic data will extend the current consolidation phase, or if underlying structural support is robust enough to avert a more significant downturn.

The Crypto Fear & Greed Index has recently slid into "Extreme Fear" territory, a stark contrast to Bitcoin's relatively stable price behavior. This divergence between sentiment and price is often viewed as a contrarian indicator. It suggests that while retail investors may be turning cautious, institutional flows have historically reversed to positive during such phases. Whether this pattern repeats hinges heavily on the outcome of impending data and central bank decisions.

Technical Analysis: Resistance at Higher Levels

As the week began, Bitcoin traded just below $90,000, a noticeable retreat from its 52-week high. The current price sits approximately 28% below that peak. The 50-day moving average runs about 7% higher, and the Relative Strength Index (RSI) at 38 indicates weakening momentum, though not yet oversold conditions.

Since hitting a low near $80,000 on November 21st, the cryptocurrency has moved within a counter-trend, moderately ascending channel. This structure has established higher lows and highs, yet the recent pullback from around $93,000 to under $90,000 highlights the market's sensitivity to profit-taking. Chart analysts identify the $94,000 to $95,000 zone as a key resistance area. They anticipate substantial selling pressure between $96,000 and $100,000, reinforced by the 50-day moving average and the Ichimoku Cloud.

Notably, the previous week closed with a bearish candlestick featuring a long upper wick. This is typically interpreted as a signal that rallies are being sold into, with investors consistently using price strength as an exit opportunity.

On-Chain Fundamentals Reveal a Solid Foundation

Beneath the surface, on-chain metrics present a more nuanced picture. A pronounced demand cluster has formed around the $80,000 level, consolidating several crucial cost bases:

• True Market Mean (~$81,000): The average on-chain acquisition price for active market participants.
• US ETF Cost Basis (~$83,844): The weighted average price of inflows into US spot Bitcoin ETFs.
• 2024 Annual Cost Basis (~$83,000): The average price of coins withdrawn from exchanges throughout 2024.

Bitcoin has held above this True Market Mean level since October 2023. Many market experts view this as a threshold separating bull and bear market structures; as long as the price remains above it, the current cycle is considered broadly intact.

Whale Movements, Exchange Outflows, and ETF Dynamics

Large-Scale Capital Movements

Significant wallet activity has been observed in December. Entities often referred to as "whales" have reshuffled approximately 36,500 BTC, worth about $3.37 billion. While the ultimate direction of this capital remains unclear, the sheer scale of the movement is likely to amplify market volatility.

Concurrently, over 403,000 BTC have been withdrawn from exchanges in recent weeks. This reduces the immediately available supply and creates potential for a "supply shock." Should demand reaccelerate, price movements could become more pronounced. Interestingly, addresses holding between 10 and 10,000 BTC increased their holdings by more than 47,000 BTC in early December, suggesting accumulation by larger investors despite the gloomy sentiment.

Should investors sell immediately? Or is it worth buying Bitcoin?

Spot ETF Flows Lack Clear Direction

Following substantial net outflows in November (over $1.1 billion weekly), capital movements in US spot Bitcoin ETFs have stabilized without establishing a clear trend:

• December 9: Net inflows of $151.9 million
• December 10: Net inflows of $223.5 million
• December 11: Net outflows of $77.5 million
• December 12: Net inflows of $49.1 million

This pattern of alternating inflows and outflows reflects a wait-and-see attitude among investors, who are increasingly focused on the macroeconomic landscape for clearer signals on monetary policy.

Macroeconomic Drivers Take Center Stage

Federal Reserve's Cautious Stance

On December 10, the US Federal Reserve lowered its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75%. The immediate market reaction for Bitcoin was muted, as this move had been nearly 90% priced in. More impactful was the Fed's communicated tone. Its emphasis on the "size and timing" of future adjustments was perceived as cautious and less growth-friendly, dampening expectations for a rapid liquidity surge that typically benefits risk assets like cryptocurrencies.

In parallel, Standard Chartered halved its Bitcoin price forecast for end-2025 from $200,000 to $100,000. Analysts cited reduced purchasing activity from corporate entities that hold Bitcoin on their balance sheets as the primary reason.

Global Central Bank Watch

This week, several other major central bank decisions could influence global liquidity conditions:

• Bank of Japan: A 94% probability is priced in for a rate hike to 0.75%. An end or weakening of the Yen carry trade could impact the availability of leveraged capital for crypto markets.
• Bank of England: A rate decision is expected this week.
• European Central Bank: A new monetary policy statement is also due.

The collective outcome of these decisions will provide clues about the tightness of financial conditions in the coming months.

Upcoming Economic Data

A dense calendar of economic releases this week will further shape risk aversion:

• Tuesday: US October Retail Sales and November Labor Market Data
• Thursday: US November CPI Inflation and Philadelphia Fed Manufacturing Index
• Friday: Core PCE Price Index (the Fed's preferred inflation gauge), Existing Home Sales, and Consumer Sentiment

Upside surprises in growth or inflation data could temper hopes for further rapid rate cuts, thereby increasing headwinds for Bitcoin.

Short-Term Outlook: Key Levels and Triggers

In the near term, much depends on Bitcoin's ability to defend the support zone between approximately $81,000 and $83,000. This area converges critical cost bases and on-chain demand. Holding this range would preserve the outlook of an intact, albeit shaky, upward structure. A decisive break below it, however, would make a deeper correction scenario far more likely—especially within an environment where macroeconomic data and central bank decisions are set to provide additional market impulses this week.