In brief
- Bitcoin has dropped 28% from its October peak, drawing closer to a key cost basis level as weekly ETF flows turn negative.
- U.S. spot Bitcoin ETFs now hold $117.67 billion in the asset, equal to roughly 6.55% of supply, providing a key support zone.
- Traders are watching whether renewed ETF demand and Wednesday’s Fed rate cut can help form a market floor.
U.S. Bitcoin exchange-traded funds continue to buy up the world’s largest crypto, even as prices remain fixed just above $90,000.
That demand has helped limit deeper pullbacks near the ETFs’ aggregate cost basis, or breakeven price, since February last year, according to Glassnode data.
Since 2024, two corrections of more than 30%—from March to August 2024 and January to April 2025—have bottomed and reversed around that cost basis. During both episodes, weekly ETF net inflows were negative, SoSoValue data shows.
A similar setup is now taking shape.
Bitcoin has fallen 28% from its October peak of $126,000, bringing it closer to the ETF cohort’s cost basis near $83,000, while weekly net inflows since the beginning of December are also in the red.
The asset is down 1.5% on the day to $89,900, having clawed back losses from a December 2 trough near $84,600.
U.S. ETF products now hold $117.67 billion in Bitcoin, roughly 6.55% of the asset’s total supply, creating a structural bid that could act as a key demand zone.
Still, tensions now center on whether ETF demand will be strong enough to establish a floor at $83,000 and turn the market higher.
“Bitcoin is sitting on a strong on-chain and ETF support cluster where risk–reward historically favours the upside,” Shivam Thakral, CEO of BuyUCoin, told Decrypt. “A sustained bounce hinges on renewed ETF inflows and macro stability over the next one to two weeks.”
All eyes are now on Wednesday’s FOMC meeting, with a quarter-point rate cut all but certain, according to the CME’s FedWatch tool.
The critical question is whether this cut represents a confident step toward easing or a policy error—where the Fed begins to loosen policy while inflation, particularly in services, remains stubbornly above the central bank’s preferred 2% target, as Decrypt previously reported.
“If we look at Fed funds futures today, the market is pricing in a rate cut on Wednesday, but not another one until June,” Mark Pilipczuk, chief marketing officer at CF Benchmarks, a Kraken company, told Decrypt.
“We believe there’s some room for upside here should the Fed signal that there is potential for another cut before the June meeting. That becomes more likely if the labor market continues to soften and inflation expectations stay in the 2–3% range.”
Thakral echoed a similar bullish outlook, indicating that a “growth-supportive cut” would reinforce the historical pattern of Bitcoin bottoming at ETF cost basis and effectively “increase the probability of a rebound.”
He warned, however, that the rebound thesis would lose momentum if the Fed’s forward guidance were to take on a hawkish tone.
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