Bitcoin Price Drops 5% : Is the Downtrend Back in Control?
Key Takeaways
- Bitcoin’s price has dropped by 5% and is now trading below the support level of $88,500.
- ETF outflows, along with several macroeconomic uncertainties such as Federal Reserve policies and stock market dips in tech giants such as NVIDIA, have caused selling pressure for Bitcoin.
- Bitcoin trades well below its 50-day moving average of $96,516 and 200-day moving average of $108,567, confirming a short- and medium-term downtrend.
- Bitcoin’s key downside targets cluster around $85,000-$86,000 as immediate support; a break below this range could accelerate a fall toward $80,000-$80,400.
Bitcoin’s price has dropped by 5% and is now trading below the support level of $88,500. The currency is now at a 30% low from its all-time high price of $126,269, with intraday lows hitting $85,263 amid broader market volatility. Over the last three weeks, Bitcoin has struggled to bounce back to above $90,000, but the bearish outlook for the token overpowered the bullish attempts.
Bitcoin’s price today is $86,239.76. This is the first time in two weeks that Bitcoin is trading below $86,000.
Reasons for the Drop
There has been an ETF outflow of a total of $3 billion. This, along with several macroeconomic uncertainties such as Federal Reserve policies and stock market dips in tech giants such as Nvidia, has caused selling pressure for Bitcoin. Risk aversion has driven investors away from high-volatility assets, such as Bitcoin, which has further exacerbated liquidations and thin liquidity in early December.
Technical Indicators Confirmed Bitcoin’s Downward Trend
Bitcoin’s recent 5% drop has raised questions about a confirmed downtrend, with several technical indicators currently flashing bearish signals based on mid-December 2025 data. Bitcoin trades well below its 50-day moving average of $96,516 and 200-day moving average of $108,567, confirming a short- and medium-term downtrend. This confirms and reinforces ongoing weakness without reversal signs.
The MACD indicates a fading downward trend. RSI at neutral levels around 44 lacks oversold conviction (below 30), failing to signal exhaustion and allowing bearish pressure to persist. ETF outflows and macro ties further validate these indicators without bullish divergence in RSI or MACD yet.
Macroeconomic Uncertainty and ETF Outflows Slowing Down Bitcoin’s Price Performance
By Early December, Bitcoin had fallen in performance. Macroeconomic uncertainty, driven by factors like Federal Reserve policy signals and upcoming US economic data, has heightened risk aversion in financial markets. This has nullified the currency’s gains in 2025. ETF outflows, exceeding $2.5 billion in some periods, have amplified the downside by shifting institutional demand from a buyer to a seller dynamic. Recent drops in Bitcoin’s price to $85,000-$88,000 reflect liquidations, thin liquidity, and deleveraging amid global growth concerns.
Spot Bitcoin ETFs saw record outflows, with BlackRock’s IBIT alone losing $1.6 billion. This is in contrast to the ETF inflows that happened in the previous months. Positioning indicators show retail pessimism for Bitcoin as well as whale accumulation, hinting at potential short-term bottoms if leverage clears. Technicals like negative MACD and price below-200-day averages signal ongoing weakness, which will not be cleared unless macro clarity emerges.
The Bottom Line: Bitcoin’s Key Downside Targets
Bitcoin’s key downside targets cluster around $85,000-$86,000 as immediate support; a break below this range could accelerate a fall toward $80,000-$80,400. A further downside risk of the price dipping to $74,000-$78,000 is also possible. Extreme scenarios point to $69,000-$72,000 if high-volume nodes fail amid sustained ETF outflows and macro pressures.
Investors should watch out for thin liquidity, which may cause a further dip for the currency. The currency has a downside bias with the resistance remaining strong at $88,000-$90,000.
Crypto & Blockchain Expert