Worst-Case Scenario for BTC: A "Fire Sale" Level
According to André Dragosch, Bitwise's European head of research, Bitcoin's "max pain" zone is situated between the critical cost-basis levels of BlackRock's IBIT at $84,000 and MicroStrategy's treasury at approximately $73,000.
Dragosch suggests that the final bottom of the current market cycle is likely to form within this range. He described these price points as "fire-sale" levels, indicating a complete reset of market positioning.
The cost basis for BlackRock's spot Bitcoin exchange-traded fund (ETF), IBIT, represents the average price at which the ETF acquired its Bitcoin holdings. When the market price approaches this threshold, investor sentiment often deteriorates. This is because ETF holders begin to assess whether continued price declines justify redeeming their shares.
This dynamic is already evident, with IBIT experiencing its largest single-day outflows of $523 million on Tuesday. This contributed to a total of $3.3 billion in ETF outflows over the past month, representing 3.5% of the total assets under management (AUM).
MicroStrategy is currently in a more precarious position. Its net asset value (NAV) recently dipped below 1, suggesting that the market now values the company's equity at a discount to the Bitcoin it holds. This has historically been an indicator of tightening liquidity and increased risk aversion. A retest of its $73,000 cost basis could further strain sentiment and lead to more significant de-risking if macroeconomic conditions worsen.
Macroeconomic Risk Builds Amidst Federal Reserve Uncertainty
Data from CryptoQuant indicates a high degree of uncertainty surrounding the upcoming December Federal Open Market Committee (FOMC) meeting. A government shutdown has delayed crucial labor data, leaving the Federal Reserve with limited information to guide its decisions.
Expectations for a rate cut in December have decreased to 41.8% as of November 20. Meeting minutes reveal a divided committee grappling with persistent inflation, which remains around 3%, and the potential risks associated with easing monetary policy too soon.
If the Federal Reserve decides against a rate cut, liquidity could remain constrained. This is the same environment that contributed to Bitcoin's sharp sell-off earlier in November.
Despite these concerns, stablecoin reserves on exchanges have reached a record $72 billion. This level of accumulation mirrors the patterns observed before every major Bitcoin rally in 2025. In a scenario where no rate cut occurs, analysts anticipate Bitcoin will trade between $60,000 and $80,000 leading up to the end of the year. This trading range is expected as liquidity remains on the sidelines until greater macroeconomic clarity emerges.