Executive Summary

The Bitcoin market is at a critical inflection point, characterized by a stark divergence between bearish institutional sentiment and bullish short-term technical indicators. Following a sharp decline toward the $80,000 support level last week, Bitcoin has staged a cautious rebound to the 85,000−87,000 range. This recovery is driven by technically oversold conditions, yet it faces immense pressure from a sustained exodus of institutional capital, with U.S. Spot Bitcoin ETFs recording over $4.34 billion in outflows over the past four weeks.

The selling pressure has pushed the average cost basis for the entire U.S. Spot ETF investor base underwater, creating significant psychological headwinds. Concurrently, major operational and regulatory risks are surfacing within the broader crypto ecosystem. The abrupt closure of Strike CEO Jack Mallers’ personal bank accounts by JPMorgan Chase has reignited fears of “debanking,” highlighting ongoing friction with traditional finance. Furthermore, a DNS attack on decentralized exchanges Velodrome and Aerodrome underscores the security vulnerabilities in the infrastructure connecting users to DeFi protocols. For the immediate future, market direction will be determined by Bitcoin’s ability to either break key resistance at $88,500 or hold critical support at $84,000.

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