Bitcoin dropped below $87,000 on Dec. 25 amid thin holiday trading and persistent exchange-traded fund outflows. The decline occurred despite on-chain metrics showing reduced selling pressure and record stablecoin reserves, creating conflicting signals for market participants.
What Happened: Christmas Selloff
XWIN Finance's Trend Index registered 34 out of 100 on Dec. 25, placing the market in "mild downtrend" territory as ETF withdrawals and U.S. session selling continued.
Bitcoin briefly fell below $87,000 before recovering, though attempts to break through resistance between $88,000 and $89,000 have failed. Options positioning has reinforced that ceiling, according to the firm's analysis.
Spot Bitcoin ETFs recorded net outflows of approximately 2,900 BTC, valued at roughly $251 million, in the latest session.
Total BTC ETF inflows have declined nearly $6 billion since their October peak.
Ethereum funds showed similar weakness, posting net negative flows on a weekly basis despite modest daily gains. Solana products attracted steady inflows, while XRP ETFs added approximately $8 million in the most recent session.
Bitcoin traded near $88,000 at publication time, up about 1% daily and weekly but down nearly 20% over three months. The 24-hour range remained compressed between $87,000 and $88,000, while the past week saw swings from $85,000 to slightly above $90,000.
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Why It Matters: Conflicting Indicators
Whale exchange inflows over 30 days sit near cycle lows, while Coin Days Destroyed continues declining, suggesting long-term holders are reducing sales, XWIN noted.
Spending from older Bitcoin cohorts has increased, a pattern that sometimes precedes major price reversals. Network activity remains subdued, indicating demand has not returned.
The Fear and Greed Index stands at 24, classified as "Extreme Fear," while DeFi borrowing has dropped sharply since August, pointing to decreased leverage.
Stablecoin supply has climbed to a record near $310 billion, representing significant sidelined capital.
With equities and gold at record highs and January rate expectations favoring a pause, macro conditions are not overtly negative. The firm suggested Bitcoin's next move depends on ETF flows and post-expiry options dynamics, warning the market may remain fragile despite emerging signs of seller exhaustion.
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