Bitcoin has been undergoing a critical resilience test.
The crypto king has decisively slipped into a bearish phase, falling below the landmark $90,000 price level and settling at $86,901.48 at press time, according to CoinMarketCap.
While the headline fact is the price, the underlying causes point to more profound structural vulnerabilities within the market.
Two pressures that caused this drop
Farzam Ehsani, CEO of VALR, highlighted the forces at play, noting that the drop below $90,000 was driven by the twin pressures of “rising interest yields and weekend liquidations.”
He said,
“Bitcoin’s drop below $90,000 is the result of a collision between the fragile market structure and weak liquidity conditions observed over the weekend”
Ehsani also noted,
“The pressure across markets intensified because the order book was shallow, and the market lacked sufficient depth to withstand another macroeconomic liquidity shock.”
This lack of sufficient depth means the market cannot withstand even a minor liquidity shock, and that the current Bitcoin [BTC] market structure is highly sensitive to external financial shocks.
The MSCI index dilemma
Another, deeper structural threat now weighing on Bitcoin is MSCI’s upcoming decision on its global index rules.
The proposal would exclude companies that hold over half of their assets in crypto, directly impacting major corporate BTC holders like Strategy, Marathon, Riot, Metaplanet, and American Bitcoin.
Together, these firms control more than $137 billion in digital assets, representing around 5% of all Bitcoin.
Because passive index funds must mirror MSCI indices, any exclusion could trigger forced selling of these companies’ stocks.
This may even push the firms to offload parts of their BTC reserves to adjust their balance sheets.
Investors are already bracing for this possibility, pricing in the risk of sharp liquidity outflows.
But if MSCI rules aggressively, the entire corporate-backed Bitcoin sector could be revalued lower, placing significant downward pressure on BTC itself.
Thus, the fate of major corporate holders, especially Strategy, is tightly bound to Bitcoin’s immediate direction.
Strategy and the bear market correlation
So far, November delivered Bitcoin’s worst monthly performance since 2018, deepening parallels with past bear markets.
Ehsani added,
“This uncertainty makes it difficult to establish a clear shift in direction, as the market continues to oscillate between forced deleveraging and muted dip-buying, with neither side able to maintain momentum.”
This highlights that the market’s immediate future is now a high-stakes waiting game.
If institutional and macro pressures continue, Bitcoin’s downturn could extend toward the $60,000–$65,000 range.
Ironically, such a drop may set the stage for a strong rebound, as major institutions and Strategy’s competitors could view those levels as prime accumulation zones.
Still, any recovery will take time – the market’s recent volatility signals that a consolidation phase is likely before momentum returns.
Echoing similar sentiments, other analyst weighs in
Juan Perez, Director of Trading at Monex USA, also noted,
“Bitcoin seems to be suffering from a fading enthusiasm across crypto as well as the tech world.”
Perez added,
“The negativity at the moment seems tied to growing concerns about increased market concentration and questionable sustainability of overall growth in that sector, considering the issues of infrastructure, as well as less cooperation in trade globally.”
That said, the unwinding of the Yen carry trade following shifting Japanese monetary policy is also one of the major reasons behind this drop.
So, whether BTC stabilizes or spirals deeper now depends entirely on how the market absorbs these mounting institutional and macro pressures.
Final Thoughts
- The short-term fate of Bitcoin is heavily tied to the actions and regulatory outcomes.
- Holding the $88,000 structural support is vital for Bitcoin.
Source: https://ambcrypto.com/bitcoin-loses-90k-analyst-warns-of-fragile-market-structure-risk/