Bitcoin technical outlook severely deteriorates | Death cross triggered, where will traders go?

This week’s Bitcoin performance can be described as “a continuous decline.” Although it managed to hold above $90,000 during the Asia session on Thursday, the price has fallen to the $87.75K level, nearly 30% off its high of $126K. More concerning is that this drop is not market noise but a genuine and powerful wave of selling.

Technical Warnings Have Sounded

Death Cross Officially Formed

The 50-day Exponential Moving Average (EMA) for Bitcoin has crossed below the 200-day EMA, forming a “Death Cross”—a notable bearish signal. Currently, BTC is well below both moving averages, indicating that the bulls face significant overhead resistance before any rebound. The downward momentum of the short-term moving averages often signals the start of a longer-term downtrend.

Dual Warnings from ADX and RSI

The Average Directional Index (ADX) has reached 38.25, well above the 35 threshold for a strong trend. This suggests that the current decline is not a chaotic fluctuation but a forceful wave of selling. Meanwhile, the Relative Strength Index (RSI) has fallen to 27.12, deep into oversold territory (<30). While extreme oversold conditions often hint at a rebound opportunity, they also indicate that the market’s “rubber band” has been stretched to its limit—once a rebound occurs, the opposing pressure could be equally intense.

The Crypto Fear and Greed Index’s extreme fear reading further reinforces this warning signal.

Capital Flows: Institutional Investors Are Retreating

BlackRock’s iShares Bitcoin Trust (IBIT) saw a record single-day outflow of $523 million on Tuesday, continuing a five-day streak of capital outflows. According to Farside Investors data, since last Thursday, this ETF has cumulatively lost over $1.4 billion, marking the highest consecutive outflows in 22 months.

The story behind these figures is clear: institutional investors are systematically withdrawing. The Fed’s December rate cut expectations have diminished, corporate buying (like MicroStrategy) has largely stalled, and ETF accumulation has slowed—indicating that the core demand cycle of this wave has passed. CryptoQuant’s latest report points out that upside potential is limited, and rebounds may face resistance below the 365-day moving average.

Market Sentiment: Bearish Bets Dominate

In the Myriad prediction market, traders’ bets are clear: 73.3% of funds are betting on Bitcoin falling to $85,000, while only 26.7% are betting on a rise to $115,000. Similar stories are playing out on Polymarket, where almost no traders are optimistic about an upward move.

Ethereum’s situation is also bleak. Myriad users estimate a 62% probability that ETH will drop to $2,500. Currently, ETH is trading around $2.95K, not far from the bearish target. XRP and Solana declined by 0.10% and -0.26% respectively today, despite the upcoming ETF launches for these projects, market sentiment remains bearish.

Short-term Holders and Leveraged Traders Are Being Liquidated

Data from Glassnode reveals the real state of the market: short-term holders are realizing losses at the fastest rate since the FTX collapse. The derivatives market has fully shifted to risk aversion, with options traders heavily buying puts and implied volatility rising. This indicates that traders who entered high positions recently are experiencing “complete liquidation.”

Price Targets and Key Supports

If BTC continues to break below $88,000-$89,000

Active investors’ cost basis is around $88,600. If BTC falls below this level, active investors will be in overall loss for the first time, and bearish momentum could further dominate the market.

First support: $84,451 (Fibonacci support)
Stronger support: $71,486

Given the extreme oversold RSI, a drop to $85K is likely to be a quick wick rather than a sustained breakdown. “Surrender-style declines” often reverse quickly after clearing leveraged longs, potentially offering aggressive traders a rebound opportunity.

Rebound resistance levels

• $92,000 (recent resistance)
• $100,492 (downtrend line resistance)

How Difficult Is It to Rise to $115,000?

To realize a bullish scenario, Bitcoin needs to: recover from the Death Cross and break above the downtrend line—an extremely challenging task, which explains why only 26.7% of traders are betting on an upward move.

In the short term, the market faces a “battle between bulls and bears.” The next few weeks will determine whether buying pressure can regain dominance or if support fails, deepening the downtrend. For the bears, the current technical environment is undoubtedly highly favorable.