BTC eyes $85k support level as selloff continues

Key takeaways

• BTC slipped below $90k a few hours ago but has rebounded and is now trading above $91k.
• The leading cryptocurrency could dip towards $85k if the selloff continues.

The cryptocurrency market has continued its bearish performance in November as Bitcoin lost 5% of its value in the last 24 hours and temporarily dropped below the $90k level. It has recovered slightly and is now trading above $91k per coin.

Institutional demand and bearish order flow see BTC underperform

The bearish performance comes as institutional demand continues to decline.  US-listed spot Bitcoin Exchange Traded Funds (ETFs) recorded $254.54 million in outflows on Monday, extending the persistent wave of withdrawals. 

According to SoSoValue, over $1.1 billion was withdrawn from U.S. spot Bitcoin ETFs over the last seven days. If the outflows continue and intensify, Bitcoin’s price could record further losses in the near term. 

In addition to that, on-chain data for Bitcoin suggests that BTC is yet to find the bottom and could record further losses in the near term. Recent data shows that the Average BTC Deposit Volume has surpassed 0.9 on Tuesday, signaling rising selling pressure. 

Historically, when average deposit volume on Binance increases, Bitcoin faces heavy selling pressure. Furthermore, the Binance Exchange Reserves have exceeded 580,000 BTC. This is a sign of growing sell pressure, with demand currently weak in the market. 

BTC could retest the $85k support level

The BTC/USD 4-H chart is bearish and inefficient as Bitcoin has extremely underperformed over the past few days. The coin faced rejection at the 38.20% Fibonacci retracement level at $106,453 since last Monday and has declined by more than 10% since then. 

If the bearish correction continues, Bitcoin could decline towards the next psychological support level at $85k. The Relative Strength Index (RSI) on the 4-hour chart is at 34, reinforcing the strong bearish momentum. The MACD indicator also signals that BTC remains in deeply oversold conditions.

However, if BTC recovers, it could extend the recovery toward the resistance level at $94,253.