Highlights
- Bitcoin faces heightened downside risk as crypto hedge funds brace for up to $20 billion in redemptions.
- Glassnode data signals weakening market sentiment, with a potential drop toward $81K.
- Bitcoin futures markets show increasing dominance by bearish traders.
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Bitcoin Price Under Pressure as Hedge Fund Redemptions Mount
Bitcoin price remains under heavy selling pressure as concerns grow over massive crypto hedge fund redemptions, potentially reaching $10–$20 billion, according to 10x Research. The latest downturn has pushed BTC to trade near $86,000, down sharply from recent highs around $92,000.
The broader crypto market is facing strong headwinds in December, driven by tax-loss harvesting, weak technical structure, and declining institutional confidence. Spot Bitcoin ETFs have recorded $357 million in net outflows, highlighting rising risk aversion among large investors.
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$20 Billion Crypto Hedge Fund Redemptions Could Trigger BTC Crash
According to 10x Research, hedge fund redemption pressure could significantly deepen Bitcoin’s correction. The firm estimates that $10–$20 billion in withdrawals may force fund managers to unwind leveraged and directional positions, amplifying sell-side pressure.
This redemption wave comes at a time when liquidity is thinning and sentiment is already fragile. Analysts warn that sustained forced selling could drag Bitcoin price toward the $80,000 level, especially if macro uncertainty persists.
Additionally, 10x Research has reiterated its bearish outlook for altcoins, noting that hedge funds are increasingly shifting toward long/short and relative-value strategies amid a difficult outlook for 2025–2026.
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On-Chain Data Signals Growing Bitcoin Weakness
On-chain analytics platform Glassnode highlights deteriorating market structure. Bitcoin has slipped below the Active Investor Price Mean of $87,900, a key short-term support level.
If selling pressure continues, Glassnode identifies the True Market Mean near $81,300 as the next major downside target. Weak momentum, combined with low spot liquidity, leaves BTC vulnerable to sharper downside moves.
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Bitcoin Futures Market Remains Bearish
CryptoQuant analyst Axel Adler Jr. reports that the Bitcoin futures market is firmly under bear control. The Bitcoin Positioning Index confirms a growing dominance of short positions, suggesting traders are betting on further downside.
Meanwhile, the Bitcoin Fear & Greed Index has plunged into extreme fear, levels historically associated with previous market crashes. Both the 30-day and 90-day moving averages of the index continue to trend lower, signaling persistent negative sentiment.
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Bitcoin Price Update
- Current BTC price: $86,467
- 24-hour change: −4%
- Intraday low: $85,304
- Intraday high: $89,982
- Trading volume: Up nearly 50% in 24 hours
The surge in volume alongside falling prices suggests distribution rather than accumulation, reinforcing the bearish near-term outlook.
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Conclusion
Bitcoin faces a critical period as crypto hedge fund redemptions, ETF outflows, and bearish on-chain signals converge. With up to $20 billion in potential redemptions, forced selling could accelerate if key support levels fail. Unless sentiment improves or strong buying interest emerges near current levels, BTC risks sliding toward the $81,000 zone, as highlighted by Glassnode. Traders should closely monitor futures positioning, ETF flows, and on-chain support levels in the coming days.
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FAQs
Why are crypto hedge fund redemptions impacting Bitcoin price?
Large hedge fund redemptions force managers to liquidate positions, increasing selling pressure and pushing prices lower, especially during low-liquidity periods.
How much could Bitcoin fall due to hedge fund redemptions?
According to 10x Research, Bitcoin could drop toward $80,000–$81,000 if up to $20 billion in redemptions materialize.
What does Glassnode say about Bitcoin support levels?
Glassnode highlights $87,900 as a key level already broken, with the next major support at $81,300.
Is the Bitcoin futures market bearish?
Yes. CryptoQuant data shows short sellers dominating, confirming bearish control in the futures market.
Are institutional investors selling Bitcoin?
Yes. Spot Bitcoin ETFs have seen $357 million in outflows, indicating rising institutional caution.
