Bitcoin Surpasses $90K, But Cautionary On-Chain Data Signals Potential Instability

Bitcoin has surged past the $90,000 mark after days of weaker performance, yet on-chain data suggests that this upward momentum may be short-lived. Indicators such as increased large Bitcoin deposits and declining USDT balances on exchanges point to ongoing selling pressure, raising concerns about the sustainability of this price recovery.

Key Takeaways

Bitcoin (BTC) has regained the $90,000 level after declining for several days; however, the rally lacks robust buying support.
Increasing large BTC deposits and dwindling USDT on exchanges indicate that the recovery may not be lasting.

Bitcoin has made a noteworthy recovery, climbing above the $90,000 threshold after several days below that level. Despite this upward movement, recent data suggests that the rally could be precarious.

Bitcoin price trend Source: TradingView

New on-chain metrics reveal that selling pressure remains prevalent, casting doubt on Bitcoin’s ability to maintain its newfound value.

Bitcoin reclaims $90K, but on-chain data warns the rally may not last

Rising Large Deposits: A Warning Sign for Stability

Recent findings from CryptoQuant show a significant rise in large Bitcoin deposits, which now make up approximately 45% of all hourly inflows—this trend has been climbing steadily since early October.

These deposits involve substantial transfers, often in the thousands of BTC, suggesting that they originate from major players rather than typical retail investors.

Bitcoin holders Source: CryptoQuant

Historically, a rise in large deposits signals distribution rather than accumulation. When significant holders transfer Bitcoin to exchanges, they are typically preparing to sell or adjust their positions. This trend coincides with Bitcoin's struggle to maintain support levels, as illustrated in the upward trajectory of the CryptoQuant data, showing increasing sell-side pressure despite price stabilization efforts.

USDT Outflows: A Diminished Buying Support for Bitcoin

Glassnode’s analysis further indicates that USDT is leaving exchanges at its fastest pace in over a year, which creates additional concerns regarding Bitcoin’s buy-side support.

Bitcoin exchange movement Source: Glassnode

When stablecoins flow into exchanges, they contribute to immediate buying liquidity. Conversely, when they exit, it indicates a lack of buying pressure. This situation is underscored by a significant red zone on the chart throughout November, which implies that this latest attempt to surpass $90K lacks solid support from stablecoin inflows. Demand in the spot market is thinning, contrasting with the robust support Bitcoin saw during earlier rallies this year.

A Fragile Recovery: The Need for Liquidity

Combining insights from both data sets presents a cautionary narrative: While Bitcoin has reclaimed the psychological $90K level, the absence of favorable liquidity trends suggests this recovery may not last, similar to previous attempts.

Looking ahead, market participants should keep a close eye on key signals that indicate a shift in the underlying flows. Until adequate liquidity returns, the market may remain in a fragile state—vulnerable to significant selling pressures that could pull Bitcoin back below the $90,000 mark.