Bitcoin Tests $90,000 Support Amid Positive Netflows — Details

Bitcoin has recently faced notable resistance around the $94,000 mark, leading to a retreat to a key psychological support level at $90,000. This price movement aligns with a significant shift in on-chain dynamics. Here are the details.

Key Takeaways

Bitcoin recently faced resistance at $94,000 and retraced to $90,000.
On-chain analysis shows a significant shift in netflows from negative to positive.
Positive netflows generally suggest increased selling pressure, but the current situation may not indicate panic selling.
The $90,000 support level is critical for determining short-term market sentiment.

Bitcoin

Bitcoin has retraced to the $90,000 support level after encountering resistance at $94,000. The trend shows a positive shift in Bitcoin’s netflows, indicating changes in market sentiment.

Exchanges Record a Shift in Netflows

According to a QuickTake post on CryptoQuant by the market analyst known as The Enigma Trader, Bitcoin is experiencing a noticeable transition from its accumulation phase, which commenced in December last year. The key metric to observe is the Bitcoin: Exchange Netflow (Total) across all exchanges, which monitors the net amount of Bitcoin entering or leaving centralized exchanges.

Typically, when the metric shows a negative value, it indicates fewer Bitcoin inflows into exchanges, suggesting that less BTC is being deposited for selling or trading. Conversely, a positive reading implies that more Bitcoin is being sent to exchanges for selling or converting into other tokens than is being withdrawn.

Bitcoin
Source: CryptoQuant

The Enigma Trader notes that since December, the netflows metric has shifted notably from deep negative levels of -11,500 BTC to a positive +1,100 BTC. Currently, around 1,100 BTC is held on exchanges, awaiting future decisions. While a rise in inflows is typically a signal of impending bearish pressure, the current situation may not be quite as dire.

The analyst points out that the inflow volume is low compared to outflows from December. This suggests that the retreat from $94,000 is more likely driven by cautious positioning at a key psychological price point rather than widespread panic selling. Traders who accumulated BTC during the December dip could be taking partial profits or strategically repositioning as the price approaches $94,000.

The Importance of the $90,000 Support Level

As Bitcoin's price declines alongside the influx of positive netflows, there remains a psychological battleground for investors. Should netflows continue to trend positive, it could introduce substantial bearish pressure into the market, leading to further price drops.

The $90,000 support level acts as a critical indicator of whether the market sentiment shifts towards bearish territory or retains a bullish outlook. If prices drop below $90,000 amid rising exchange inflows, it would suggest a prevailing bearish sentiment. Conversely, if Bitcoin holds above $90,000 with steady exchange inflows, it would indicate that the broader bullish trend persists.

At the time of writing, Bitcoin is valued at approximately $90,463, with CoinMarketCap data showing no significant changes in price over the previous 24 hours.

Bitcoin
BTC trading at $90,540 on the daily chart | Source: BTCUSDT chart on Tradingview.com

Featured image from Shutterstock, chart from Tradingview