Coinbase Institutional issued a stark warning to investors as Bitcoin breaks through critical support levels, citing several bearish indicators, including massive ETF outflows, whale distribution and compressed valuations of digital asset treasuries.
The rating comes as BTC is trading decisively below its 200-day moving average after a 32% decline from recent highs above $126,000, with the crypto now testing support near $93,000.
Source: TradingView
The latest stock market analysis reveals a confluence of negative factors influencing Bitcoin price action.
“In this environment, we believe higher probability setups favor breakout trades over jackknifing,” Coinbase said in a recent post, advising caution even as quantitative tightening ends and the Federal Reserve re-enters bond markets.
Bitcoin has systematically broken through every major technical and chain support band that has historically anchored bull market rallies.
According to Coinbase’s November report, the crypto is now trading below the short-term cost-to-hold and 75% profit threshold that provided support in previous cycles, leaving no apparent price ceiling.
The $98,000-$100,000 battleground, which previously represented a thick band of holders anchored at that level, collapsed as the price cut with minimal attempts at a comeback.
Source: Coinbase
Recent buyers are underwater, with realized losses reaching levels last seen during the November 2022 FTX crash.
This creates an increased risk of capitulation as short-term holders rush to cut losses rather than hang on in the crisis.
The rapid decline in the $90,000-$85,000 range showed a lack of organic demand to cushion the declines, with cost-based distribution falling below current levels.
Options markets also turned from cautious to defensive, with the Bull-Bear index turning firmly negative in the short to medium term.
Traders are paying premiums for downside protection rather than upside exposure, while long options are near neutral, suggesting structural uncertainty rather than deep pessimism.
Source: Coinbase
Meanwhile, long-term changes in the net position of holders turned decidedly negative over a 30-day period, with market intelligence firm Arkham identifying at least one early Bitcoin whale that completely exited an 11,000 BTC position worth about $1.3 billion between late October and November.
ETF spot flows, previously a dominant incremental buyer, have reversed dramatically.
November 2025 saw record cumulative net outflows as the trailing seven-day total turned significantly negative after price broke through key levels.
Source: Coinbase
When allocators redeem ETF shares, issuers must sell Bitcoin on sight or reduce hedges, amplifying broader de-risking episodes.
US spot Bitcoin ETFs now manage $168 billion in assets, holding about 1.36 million BTC, representing 6.9% of the circulating supply.
Treasury demand for digital assets similarly cooled, with the market value of companies over net asset value compressing below parity for the first time since 2024.
Several treasury vehicles are now trading at discounts to their Bitcoin holdings, creating latent risk as shareholders can pressure management to slow purchases, hedge exposure or monetize holdings.
That pressure comes as companies including Strategy build cash reserves, with Strategy announcing a $1.44 billion reserve covering 21 months of obligations as it updates fiscal guidance for the project’s operating results from a $7 billion loss to a $9.5 billion gain, based on year-end Bitcoin prices.
The change comes ahead of MSCI’s January 15, 2026 decision to exclude companies holding more than half of their assets in crypto from global indices.
JPMorgan estimates that this could trigger institutional forced sales of between $2.8 billion and $8.8 billion.
Liquidity of the crypto-native dollar is spinning as the aggregate supply of stablecoins contracts after a steady rise through October.
The 30-day momentum posted its weakest reading since 2023, with supply shrinking reflecting deleveraging and capital leaving chains for fiat or safer assets.
While stablecoins have reached a record of over $300 billion in circulation, recent contractionary signals have reduced the “dry powder” available to watch rallies, despite stablecoins processing $225.6 billion in daily transfer volume.
Source: Coinbase
Despite these headwinds, Grayscale Research recently challenged widespread pessimism, arguing that the current structure of the Bitcoin market differs fundamentally from previous cycles.
The asset manager argues that the dominance of exchange-traded products and corporate Treasuries, rather than retail exchanges, means Bitcoin will not follow historical patterns of deep and prolonged declines.
Source: Grayscale
Technical indicators, including the increased decline in put options and the capitulation of traders in the chain, suggest that a bottom formation may be underway, with accumulation patterns continuing among large holders.
Read original story Coinbase Warns Bitcoin Under Pressure, Citing ETF Exits, Whale Exit By Anas Hassan at Cryptonews.com
