Bitcoin still enjoys institutional inflows, but outlook remains bleak

Bitcoin dipped below $89,000 on Tuesday evening in New York as broader cryptocurrency markets remain under pressure.

Ethereum (ETH), Solana (SOL) and XRP (XRP) also trading lower, according to market data.

Market structure suggests controlled risk reduction rather than panic selling, with sentiment gauges showing neutral readings and the Altcoin Season Index remaining low, confirming that capital continues to favor Bitcoin over higher-beta assets.

Institutional positioning remains a key stabilizing factor, according to CoinShares data, which shows strong net crypto exchange-traded product inflows last week—the strongest weekly intake of the year so far and the largest since October.

Bitcoin (BTC) absorbed the majority of inflows, reinforcing its role as the primary institutional exposure during periods of uncertainty, the data showed. Ethereum followed, while XRP and Solana attracted smaller shares.

Assets under management across crypto funds have risen to the highest level since November, according to the report. BlackRock led issuers with the largest inflows, highlighting continued demand from large allocators even as spot prices softened.

Most inflows occurred earlier last week, the data showed. But sentiment weakened this week amid tariff headlines and geopolitical risks.

Macro pressure remains a near-term headwind

Derivatives data supports the notion of a measured reset rather than renewed speculation. Bitcoin futures open interest has increased since January, according to Coinglass. This follows an earlier open interest contraction between October and December when Bitcoin corrected. Leverage remains well below late-2025 levels, reducing liquidation risk, the data indicated.

Bitcoin options open interest now exceeds futures open interest, pointing to more structured hedging and positioning rather than directional leverage, according to market observers. This setup increases the likelihood that price dips are absorbed instead of amplified.

Meanwhile, the U.S. dollar slipped after President Donald Trump signaled potential tariffs starting in February on goods from NATO allies. The move triggered risk-off flows into traditional havens, lifting the euro, pound, and Swiss franc and sending the dollar lower against the yen and Swiss franc.

Persistent trade tensions and policy uncertainty continue to bolster Bitcoin’s appeal as a long-term hedge, especially as institutional exposure through regulated products rises. Bitcoin broke a key uptrend that had held through most of January, triggering accelerated selling and long liquidations in futures markets. Near current support, smaller candle bodies and long lower wicks indicate sell pressure is being absorbed, suggesting selective buying rather than panic.

The Relative Strength Index is deeply oversold, a condition that often precedes short-term relief moves when it aligns with major horizontal levels, according to technical indicators.

A key support zone now serves as a pivot point. Holding above it keeps the potential double bottom pattern intact and limits immediate downside risk, analysts said.

If support holds, upside tests may target nearby resistance levels where broken structure converges, according to technical analysis. A clean break below the pivot would invalidate the setup and expose lower support levels.