Bitcoin Price Analysis: BTC Tumbles Below $90,000, ETFs Register Outflows, Is The Rally Done For?
Bitcoin’s (BTC) first rally of 2026 hit a roadblock on Wednesday as investor sentiment waned and the crypto market retreated. The flagship cryptocurrency fell nearly 3% to $91,279, recovering from a low of $90,576. Selling pressure persisted on Thursday as BTC slipped below $90,000, down 1.50%.
BTC’s latest decline came despite several bullish signals, including a $280 million BTC accumulation and MSCI deciding to keep crypto treasury companies in its market index.
MSCI Retains Digital Asset Treasury Companies In Indexes
Strategy shares rose nearly 7% after Morgan Stanley Capital International (MSCI) decided to retain digital asset treasury companies in its market index for the time being. However, MSCI stated in a note that digital asset treasury companies will be subject to broader consultations to distinguish them from investment companies and other companies holding digital assets as part of their core operations.
This broader review is intended to ensure consistency and continued alignment with the overall objectives of the MSCI Indexes, which seek to measure the performance of operating companies and exclude entities whose primary activities are investment-oriented in nature.
MSCI identifies digital asset treasury companies as companies with 50% of their holdings in digital assets. The inclusion ensures that digital asset treasuries remain eligible for passive index funds, sustaining demand and liquidity while broadening institutional ownership of digital assets. The exclusion of digital asset treasury companies could have seen companies like Strategy lose billions in passive capital inflows.
Morgan Stanley ETF Could Offer Value Beyond Just Inflows
ProCap Chief Investment Officer Jeff Park believes Morgan Stanley’s spot Bitcoin ETF could deliver strategic benefits across the firm even if it underperforms. Park stated in a post on X,
Morgan Stanley is making the bet that even if their ETF doesn’t scale to blockbuster success, there’s an intangible benefit that will help build their clout.
Park’s comments come a day after Morgan Stanley filed with the United States Securities and Exchange Commission (SEC) to launch a Bitcoin and Solana ETF. According to Park, Morgan Stanley’s move will bring social, reputational, and financial benefits irrespective of inflows. He also highlighted Morgan Stanley’s “focused attention” on monetizing its brokerage subsidiary, ETRADE, through crypto trading and tokenization partnerships.
This becomes especially more relevant as a positive externality if it helps recruit top talent vs competitors.
Meanwhile, Morningstar ETF analyst Bryan Armour believes Morgan Stanley’s push into crypto means it wants to move clients who invest in Bitcoin into their ETFs. He also believes other banks could follow Morgan Stanley, stating,
A bank entering the crypto ETF market adds legitimacy to it, and others could follow.
Crypto Representatives Make Beeline For the US Capitol
Crypto executives are rushing to Washington, D.C., to engage with lawmakers with a markup event on legislation addressing digital asset market structure scheduled for next week. According to Cody Carbone, CEO of crypto advocacy group The Digital Chamber, there was a possibility the Senate Agriculture Committee could hold a markup on its version of the Responsible Financial Innovation Act (RFIA) at the same time as the Senate Banking Committee. The Senate Banking Committee will vote on the market structure bill on January 15.
Carbone stated that the Digital Chamber has been actively involved in drafting legislation and has been invited by lawmakers to provide feedback on different versions of the bill.
We’ve been very intentional, given our diverse membership to bring in participants from all across the digital asset ecosystem: exchanges, token issuers, banks, Bitcoin miners […] infrastructure providers, DeFi protocols.
Bitcoin (BTC) Price Analysis
Bitcoin’s (BTC) rally hit a roadblock on Wednesday as momentum waned and selling pressure returned. The flagship cryptocurrency fell almost 3% to $91,279 on Wednesday. Selling pressure persisted on Thursday as BTC fell to a low of $89,515. However, it has reclaimed $90,000 and is trading around $90,050.
Analysts attributed the decline to large ETF outflows. Spot Bitcoin ETFs recorded $243 million in net outflows on Tuesday and $486 million on Wednesday. According to analysts, the outflows are part of a portfolio rebalance rather than a major loss of conviction in the asset. According to Jeff Mei, BTSE COO, traders are chasing upside beyond BTC’s ceiling and rotating towards assets like Solana (SOL) and Ripple (XRP). The flagship cryptocurrency tested the $94,000-$95,000 zone but failed to hold this level and is currently testing the $90,000 support level.
BTC’s decline came despite several bullish signals, including a whale-linked $280 million BTC accumulation and MSCI’s decision to keep digital asset treasury companies in its benchmark indexes. MSCI stated in an announcement on Tuesday that it no longer plans to adjust index weightings to reflect newly issued shares, limiting passive demand for Strategy shares. Previously, when digital asset treasury companies like Strategy issued new equity to raise capital for Bitcoin purchases, passive funds tracking MSCI indexes were required to buy a portion of the issued shares. However, with the buying obligation gone, it reduces a key source of demand for Strategy shares.
This means Strategy could struggle to raise capital for additional Bitcoin purchases. Analyst Crypto Rover stated,
For those who are thinking this is a small deal, Strategy issued $15 billion+ in new shares in 2025. If they try to do something similar in 2026, MSTR will face a brutal crash due to no passive buying.
Technical indicators suggest that BTC could drop to $90,000 again, potentially falling to the $88,000-$89,000 zone.
BTC started the previous week in the red despite reaching an intraday high of $90,325, losing momentum, and settling at $87,110, down almost 1%. The price recovered on Tuesday, rising 1.48% to $88,397. However, selling pressure returned on Wednesday as BTC fell 1.02% to $87,497. Bullish sentiment returned on Thursday as the price rose 1.42% to $88,738. Buyers retained control on Friday as BTC rose 1.37% and settled at $89,957.
Source: TradingView
Price action remained positive over the weekend as BTC rose 0.71% on Saturday and 0.99% on Sunday to reclaim $90,000 and settle at $91,494. Bullish sentiment intensified on Monday as BTC rose nearly 3%, crossing $93,000 to $93,870. Selling pressure returned on Tuesday as BTC fell to a low of $91,203. However, it reclaimed $93,000 and settled at $93,772, ultimately registering a marginal decline. Selling pressure intensified on Wednesday as the price fell nearly 3% to $91,279. BTC is currently down almost 2%, trading around $89,792.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.