Bitcoin's sharp drop leaves ETF holders underwater as Fed uncertainty looms

Bitcoin's price has fallen sharply, dropping to around $82,300—a decline of about 8.5% from the average purchase price of U.S. spot Bitcoin ETF holders. The drop comes as markets react to uncertainty ahead of U.S. President Donald Trump's announcement of a new Federal Reserve chair later today. Analysts are now watching key support levels to gauge whether a rebound is likely or if further losses lie ahead.

The current Bitcoin price of $82,300 sits below the combined average purchase price of $84,500 for both spot and strategy-based BTC ETFs. This level is seen as critical support, with a sustained drop beneath it potentially signalling a deeper market downturn. Since mid-2025, demand growth for Bitcoin has weakened, with the 30-day average turning negative for the first time in months.

Technical indicators, however, suggest some optimism. The Relative Strength Index (RSI) stands at around 63, while the Moving Average Convergence Divergence (MACD) shows a bullish crossover—both pointing to possible upward momentum. On-chain data also indicate reduced selling pressure and recovering ETF inflows. If Bitcoin breaks above the $94,500 resistance level, analysts believe it could push toward $100,000.

Historically, Bitcoin has rebounded from the ETF average cost basis of $90,200, which was set in 2024. Yet, recent fluctuations in ETF inflows, particularly a sharp decline in late 2025, have kept markets volatile. Fundstrat's Tom Lee warned of a potential deeper drawdown as investors assess the impact of the new Fed chair on monetary policy and risk assets.

Bitcoin ETF holders are currently underwater, with prices hovering below key support levels. The market's next move may depend on whether Bitcoin holds above $84,500 or if selling pressure intensifies. Traders are closely monitoring technical signals and Fed-related developments for clearer direction.