Bitcoin Dips Below ETF Cost-Basis Levels

Bitcoin has just reached 86,000 dollars, a pivotal threshold that places the asset at the heart of an area referred to as “max pain” by several analysts. In a climate of monetary tension, this drop fuels fears of an imminent institutional capitulation.

Bitcoin Between $84,000 and $73,000 : A Zone of Maximum Tension

The recent Bitcoin correction down to 86,000 dollars brings it dangerously close to what some analysts call a “max pain” zone.

For André Dragosch, head of research at Bitwise Europe, this pivotal zone lies between 84,000 dollars, the average acquisition cost of BlackRock’s ETF (IBIT), and 73,000 dollars, that of Strategy’s Bitcoin treasury.

“The max pain zone is located between two average capital acquisition cost levels : “$84,000 for IBIT, BlackRock’s ETF, and about $73,000 for Strategy”, he explained.

These key technical levels come with increased risk of massive sell-offs if the market continues its decline. Here are the major points to remember about this critical zone :

• $84,000 : average purchase level of the iShares Bitcoin Trust (IBIT), BlackRock’s ETF. Approaching this threshold, institutional investors begin to reconsider their positions, increasing the risk of massive buybacks ;

• $73,000 : the average acquisition price of Strategy’s Bitcoin treasury, a company heavily exposed to BTC volatility. If this threshold is reached, it could increase pressure on the stock and the market ;

• Dragosch believes a cycle low could materialize in this zone, indicating a form of forced cleaning of overly optimistic positions ;

• Entry into this range could worsen ETF holders’ nervousness and trigger a liquidation spiral, or disengagements typical of capitulation periods.

This “max pain zone” reflects a form of psychological threshold for major market players. If it were breached sustainably, it could mark a technical bottom but also test the resilience of institutional demand. For now, the market is moving on the edge of this zone in an atmosphere of extreme tension.

A Worrisome Conjunction

While the tension around technical levels is palpable, it is exacerbated by worrying signals on the capital flow side.

The iShares Bitcoin Trust (IBIT), an ETF launched by BlackRock, logged its worst net outflow day last Tuesday, with withdrawals of $523 million. This movement fits into a general trend: cumulative outflows across all spot Bitcoin ETFs reached $3.3 billion in one month, around 3.5% of total assets under management.

This dynamic is aggravated by the situation of Strategy, whose net asset value (NAV) has fallen below 1. In other words, the market now values its shares below the bitcoin value they represent, signaling marked distrust and a gradual drying up of liquidity.

Added to this is macroeconomic uncertainty. After a government shutdown delayed key employment data, the next FOMC meeting in December will be decisive. Thus, the probability of a rate cut has fallen to 41.8% , leaving the risk of a monetary status quo that could prolong tension on risk markets.

In such a context, short-term prospects for bitcoin remain constrained by market conditions. If liquidity remains limited, BTC’s trajectory might oscillate between $60,000 and $80,000 until year-end. However, some contrary signals are emerging: reserves of stablecoins on exchanges reach a record high of $72 billion, a level historically associated with the onset of strong bullish recoveries.