As Bitcoin breaks through key support levels, the Coinbase institution issued a stern warning to investors, citing multiple bearish indicators, including massive ETF outflows, whale allocations and digital asset Treasury valuation compression.
Assessment is as follows Bitcoin After falling 32% from recent highs above $126,000, the cryptocurrency is trading significantly below the 200-day moving average and is currently testing support near $93,000.
Source: TradingView
The exchange’s latest market analysis shows a combination of negative factors affecting Bitcoin’s price action.
“In this environment, we believe higher probability setups favor breakout trades rather than knife chasing trades,Coinbase said in a recent article that caution is advised even as quantitative tightening ends and the Fed re-enters the bond market.
Bitcoin has systematically broken through every major technical and on-chain support band that has historically anchored bull market rallies.
The cryptocurrency currently trades below its short-term holder cost basis and the 75% profit threshold that provided support in previous cycles, leaving no clear price floor, according to a November report from Coinbase.
The $98,000 to $100,000 battleground previously represented a large number of holders anchored at this level, but it collapsed as price attempted a breakout with minimal bounce.
Source: Coinbase
Buyers have been stuck recently, with realized losses soaring to levels seen during the November 2022 FTX crash.
The risk of capitulation rises as short-term holders rush to cut their losses rather than hold on during a downturn.
A swift move below the $90,000 to $85,000 range suggests a lack of organic demand to mitigate the decline, while cost basis allocations are thinning below current levels.
The options market has also turned from cautious to outright defensive, with bull and bear indices turning negative in both the short and medium term.
Traders are paying a premium for downside protection rather than upside exposure, while long-dated options are hovering around neutral, indicating structural uncertainty rather than deep pessimism.
Source: Coinbase
Meanwhile, long-term holder net position changes turned significantly negative on a 30-day basis, with market intelligence firm Arkham finding that at least one early Bitcoin whale completely exited an 11,000 BTC position worth approximately $1.3 billion between late October and November.
Spot ETF flows were previously major incremental buyers, but have now undergone a dramatic reversal.
In November 2025, cumulative net outflows reached an all-time high, as total funds turned significantly negative over the past seven days after the price broke through key levels.
Source: Coinbase
When allocators redeem ETF shares, the issuer must sell spot Bitcoin or reduce hedges, amplifying the broader risk-off event.
The U.S. Spot Bitcoin ETF currently manages $168 billion in assets and holds approximately 1.36 million bitcoins, accounting for 6.9% of the circulating supply.
Demand for digital asset Treasury bonds has also cooled, with the ratio of company market capitalization to net asset value falling below parity for the first time since 2024.
Multiple financial instruments currently trade at a discount to its Bitcoin holdings, creating potential risks as shareholders could pressure management to slow purchases, hedge exposure or monetize their Bitcoin holdings.
This pressure is manifesting itself as companies building cash reserves, including Strategy, which announced it is building $1.44 billion in reserves to cover 21 months of debt while updating financial guidance on project operating results, ranging from a $7 billion loss to a $9.5 billion gain, depending on the price of Bitcoin at the end of the year.
The shift comes ahead of MSCI’s decision on January 15, 2026, whether to exclude companies that hold more than half of crypto assets from the global index.
JPMorgan estimates that this could trigger institutional forced selling of $2.8 billion to $8.8 billion.
Liquidity in the cryptocurrency’s native U.S. dollar is rolling as the total stablecoin supply shrinks after growing steadily in October.
30-day momentum is at its lowest level since 2023, with shrinking supply reflecting deleveraging and capital moving off-chain into fiat or safer assets.
The recent contraction signals have reduced the “dry powder” available to chase the rally, even as stablecoins’ daily transfer volume reached a record $225.6 billion in circulation.
Source: Coinbase
Despite these headwinds, Grayscale Research has recently challenged the prevailing pessimism, arguing that Bitcoin’s current market structure is fundamentally different from previous cycles.
The asset manager believes that the dominance of exchange-traded products and corporate vaults rather than retail exchanges means Bitcoin will not follow a historical pattern of long-term deep declines.
Source: Grayscale
Technical indicators, including rising put skew and on-chain trader capitulation, suggest a bottom may be forming and accumulation patterns by major shareholders continue.
Read original reporting from Anas Hassan of Cryptonews.com Coinbase warns of pressure on Bitcoin, citing ETF outflows and whale exits
