CMC News

$BTC Droped Below $90,000 as Psychological Support Breaks

$BTC fell below $90,000 on Monday night, marking a seven-month low as institutional repositioning and profit-taking from short-term traders accelerated. The crypto briefly touched $89,650 before partially recovering to $89,990 as analysts pointed to critical support levels ahead.

Rachael Lucas, crypto analyst at $BTC Markets, described the move as a significant psychological break that underscores current market fragility. Institutional investors are leading the charge, with ETF outflows signaling profit-taking and risk-off positioning ahead of year-end. Spot $BTC ETFs in the United States have posted over $3 billion worth of net outflows in the past three weeks, according to SoSoValue data.

Vincent Liu, CIO at Kronos Research, said $BTC's long-term value as digital gold remains intact, but short-term selling from traders, leveraged players, and funds adjusting exposure is weighing on prices. Macroeconomic factors and asset rotation continue to drain liquidity from the market, putting further pressure on prices. Market experts previously pointed out that liquidity has been tight recently due to the U.S. government shutdown.

The shutdown kept the Treasury General Account elevated by limiting the government's ability to spend on non-essential operations. Uncertainty surrounding the Federal Reserve's interest rate decision in December also weighs on investor sentiment. While traders were hopeful for another rate cut next month, recent reports suggested the move is being debated within the central bank.