Bitcoin Struggles at $90,000 as Demand Indicators Turn Negative Heading Into New Year

Demand Indicators Flash Warning Signs

Bitcoin's apparent demand has flipped negative after falling to its lowest level since October, as traders and investors adopted a risk-off approach into the new year ^[1]. Capriole Investment's Bitcoin Apparent Demand metric reveals that demand for Bitcoin has dropped sharply over the last two weeks to -3,491 BTC on Monday, levels last seen on Oct. 21 ^[1].

Bitcoin's apparent demand had been positive since Nov. 6, peaking at around 18,700 BTC on Nov. 26, before reversing sharply ^[1]. The negative value suggests declining demand.

Meanwhile, Bitcoin's Coinbase Premium Index, which measures the difference in pricing between the BTC/USD pair on the largest US exchange and Binance's BTC/USDT equivalent, has also dropped sharply over the last two weeks ^[1]. The index has tanked to the current value of -0.08 from 0.031 on Dec. 11 ^[1].

The Coinbase premium is an indicator of demand from US retail investors, and a negative value indicates more selling pressure ^[1]. "The Coinbase $BTC Premium Index is still printing deep red bars, signalling that US selling pressure hasn't lifted yet," said analyst Mv_Crypto in a recent X post, adding: "Until this metric recovers, approaching the long side requires extreme caution" ^[1].

Spot Bitcoin ETFs continue to bleed, recording $782 million in outflows last week, indicating risk-off appetite among institutional investors ^[1].

Critical Resistance at $90,000

Data from TradingView shows the BTC/USD pair trading 6.6% below its yearly open of $93,300, risking the first-ever post-halving "red" year ^[1]. Bitcoin currently holds the support at $84,000, with the price being rejected four times from the $90,000 level since Dec. 15 ^[1].

Bitcoin price volatility returned with a vengeance into the weekly close, with a spike above $90,000 coming soon after ^[2]. This attempt, in line with previous ones, failed to flip that key level back to definitive support ^[2].

Bitcoin's bullish case now hinges on bulls overcoming the resistance at $90,000, an area that acted as formidable support in early December ^[1]. Momentum should start to return once the bulls reclaim the $90,000-$92,000 zone ^[1].

Contrarian Whale Positioning

In a clear contrast to the broader market mood, large-volume traders on crypto exchange Bitfinex appear anything but bearish on the BTC price outlook ^[2]. As noted by trader BitBull, whales' long BTC positions are at their highest levels since mid-February ^[2].

Market Conditions and Outlook

The market suffers from lacking depth at year-end, with trading volumes significantly below normal levels ^[3]. Institutional markets like futures and over-the-counter trades show elevated tensions ^[3]. In such an environment, price movements can quickly become exaggerated, with small impulses triggering strong reactions in either direction ^[3].

Despite the sideways phase, there have been noticeable liquidations recently, especially on the short side ^[3]. This indicates that many traders continue to bet on falling prices and are willing to accept ongoing costs for doing so ^[3].

An increase in demand-side pressure, reinforced by a return of spot ETF inflows, is required for a sustained rally in 2025 ^[1]. Bitcoin has disappointed bulls in 2025, despite hitting new all-time highs of $126,200 just two months ago ^[2]. A drawdown of nearly 40% has since wiped out positive sentiment ^[2].

An analyst predicts that Bitcoin needs a 6.24% rally to close 2025 in the green ^[2].