NewsletterBitcoin Risks Deeper Fall on $20 Billion Crypto Hedge Fund Redemptions
Highlights
- Bitcoin faces higher risk of further fall amid $20 billion in crypto hedge fund redemptions.
- Glassnode highlights weakening sentiment and signals potential crash to $81K.
- Bitcoin futures market is under bear control.
Bitcoin price trades around $86k after crashing from $92k amid panic among institutional investors, as evidenced by $357 million spot Bitcoin ETF outflows. Experts such as 10x Research and on-chain data platforms expect a further drop in BTC price, especially amid tax-loss harvesting and weak technical structure.
Crypto Hedge Fund Redemptions Pose Greater Risk of Bitcoin Price Fall
Bitcoin faces a significantly higher risk of a crash from up to $20 billion in crypto hedge fund redemptions, according to 10x Research. It adds to the existing market headwinds of tax-loss harvesting in December, exerting downward pressure on Bitcoin.
10x Research expects $10 to $20 billion in redemptions by crypto hedge funds, which could drag BTC price to $80k. Also, the firm warned earlier about Bitcoin entering a bear market, while maintaining a bearish outlook on altcoins.
The redemption wave is forcing crypto hedge fund managers to unwind positions in a challenging market environment, amplifying selling activity and adding to market stress.
Many crypto hedge fund managers are now seeking long/short, relative-performance alpha amid an increasingly challenging environment in 2025 and 2026.
BTC On-Chain Data Highlights Weakness
On-chain analytics from Glassnode revealed bearish sentiment as Bitcoin continued to break support levels. Bitcoin price has slipped to $86k, just below the Active Investors Mean at $87.9k.
If weakness continues, the next major support level sits near the True Market Mean at $81.3k, Glassnode added. The weakening momentum increased amid sell pressure and thin liquidity, keeping the market vulnerable to further downside.
CryptoQuant on-chain analyst Axel Adler Jr. pointed out that Bitcoin futures market is under bear control. The Bitcoin Positioning Index confirmed dominance by short sellers.
Moreover, the Bitcoin Fear & Greed Index has dropped into extreme fear, reaching to levels witnessed during earlier crashes. The 30-day and 90-day moving averages of the index have dropped sharply, indicating a sustained bearish sentiment.
BTC price currently trades at $86,467, down nearly 4% in the past 24 hours. The intraday low and high are $85,304 and $89,982, respectively. Furthermore, trading volume has increased by 50% over the last 24 hours.
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