Bitcoin Tests Critical $87,000 Support Level Amid Spot ETF Outflows

As of January 29, 2026, Bitcoin is navigating a precarious position around the $87,000 mark. This specific price point is significant because it sits just above the $86,600 average entry price for spot Bitcoin ETF investors. Known as the "realized price" for ETF holders, this zone serves as a pivotal behavioral boundary where market participants must choose between holding through volatility or exiting at break-even. This situation represents the first major structural stress test for the market since the widespread adoption of spot ETFs.

Research from CryptoQuant, led by Head of Research Julio Moreno, identifies this price range as a critical psychological threshold. Historically, maintaining a price above the realized entry cost bolsters investor confidence and keeps capital flows steady. Conversely, a sustained dip below this level removes the "profit buffer" for many holders, potentially triggering a wave of ETF share redemptions. Despite recent capital exits, the realized price has remained relatively stable, suggesting the market is currently absorbing selling pressure from speculative traders and late-cycle entrants.

The current market climate follows a period of record-breaking activity, with cumulative inflows into spot Bitcoin ETFs peaking at $72.6 billion on October 10, 2025. Since that high-water mark, the market has seen a net outflow of approximately $6.1 billion, bringing total assets under management down to $66.5 billion—an 8.4% decline. This cooling period began shortly after Bitcoin reached its all-time high of approximately $126,200, which dampened institutional appetite, particularly among those who entered the market during the final stages of the price surge.

Looking at the broader industry landscape, analysts at Bitwise previously suggested that the fourth quarter of 2025 marked the conclusion of the "bear market" phase, even as prices showed signs of weakness. They pointed to improving fundamentals, such as record-breaking activity on Ethereum and Layer-2 networks and rising revenues for crypto-native firms. This divergence between price action and fundamental growth mirrors the start of 2023, which preceded a two-year bull run. However, other experts like Tom Lee of Fundstrat remain cautious, predicting that 2026 could be a challenging year due to geopolitical uncertainties and the impact of trade tariffs.

The ongoing price action near $87,000 serves as a direct trial for the resilience of the new cohort of ETF-driven investors. If the market manages to hold above this average entry level, it could reinforce long-term holding patterns; however, a break below could shift the narrative from passive accumulation to active distribution. On the macroeconomic front, Bitcoin continues to mirror the behavior of high-risk technology assets, reacting sharply to geopolitical tensions, including recent US tariff threats directed at Canada.