The cryptocurrency market is undergoing a significant correction, with Bitcoin (BTC) leading the downturn. After a strong rally that pushed prices above $109,000 in early 2025, BTC has now dropped below $98,000 — a nearly 7% decline in just 24 hours. With growing liquidations, declining network activity, and weakening institutional momentum, traders are bracing for a potential breakdown under the critical $95,000 support level.
This article explores the key on-chain, technical, and market sentiment indicators behind the current pullback — and what could come next for Bitcoin in the short to medium term.
Massive Liquidations Signal Trader Panic
The crypto market has seen a staggering $838 million in total liquidations** over the past 24 hours, reflecting a sharp shift in trader sentiment. Of this, **$247.39 million came from long positions in Bitcoin alone, indicating that leveraged bulls are being aggressively squeezed.
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The largest single liquidation occurred on the HDX exchange in the BTC-USDT pair, amounting to $98.46 million** — one of the biggest isolated margin calls in recent weeks. As bearish momentum builds, open interest across derivatives markets has declined to **$65.34 billion, while the long-to-short ratio has dipped below 0.8737, suggesting more traders are now betting on further downside.
Despite a relatively neutral funding rate of 0.0094%, the reduction in long positions shows growing caution among speculative traders. When combined with rising liquidations, this paints a picture of weakening confidence in a near-term rebound.
Declining User Activity Hints at Market Fatigue
Beyond price action and trading sentiment, on-chain metrics are flashing warning signs. One of the most telling indicators — daily active Bitcoin addresses — has hit a record low in 2025, falling from 1.28 million on January 1st to just 1.22 million.
Even more concerning is the drop in unique active addresses, which have declined from 676.24K to 655.58K — a 17.86% decrease over the same period. The 7-day change in new addresses is down 21.27%, signaling reduced network engagement and fewer new participants entering the ecosystem.
This contraction in user activity often precedes extended consolidation or bearish phases, as fewer transactions and lower adoption reduce organic demand for BTC. Historically, such lulls in activity have coincided with macro-level corrections, especially when external market pressures amplify internal weakness.
Institutional Inflows Slow Amid Political Shifts
Institutional demand played a pivotal role in pushing Bitcoin above $109,000 during the first week of January 2025 — coinciding with the start of Donald Trump’s second presidential term. U.S.-based **spot Bitcoin ETFs recorded $1.76 billion in net inflows** that week, providing strong bullish momentum.
However, the pace has slowed dramatically. By January 24, weekly inflows had dropped to $517.67 million**, and sentiment began to waver as global economic concerns resurfaced. While total assets under management across the 12 U.S. spot Bitcoin ETFs reached **$123.06 billion, any sustained slowdown could undermine market resilience.
If macroeconomic headwinds — including AI-driven market disruptions and shifting regulatory expectations — continue to dampen investor appetite, institutions may hold back from further commitments. This could leave the market vulnerable to deeper corrections, especially if retail participation remains tepid.
Technical Analysis: BTC Eyes $95K Breakdown
From a technical standpoint, Bitcoin is showing classic signs of a bearish reversal. On the 4-hour chart, large bearish engulfing candles have formed near the $105,000 resistance zone, marking the beginning of the current correction.
Key levels to watch:
- Immediate support: $97,396 (67.80% Fibonacci retracement)
- Next major support: $94,474 (78.60% Fibonacci level)
- Downside risk: Break below $95,000 could accelerate selling toward $90,000
BTC has already broken below the 200-period EMA (Exponential Moving Average) and is now testing the $98,000 psychological level. The 20-EMA is poised to generate a death cross by moving below the 50-EMA — a bearish signal often associated with prolonged downtrends.
Meanwhile, the 4-hour RSI has dropped to 25.93, indicating oversold conditions but also confirming strong selling pressure. While oversold readings can precede rebounds, without immediate bullish catalysts or volume support, any recovery may be short-lived.
On the upside, sustained trading above $97,396 could allow BTC to retest the **38.20% Fibonacci level at $101,477**, potentially reclaiming the 100-EMA. But for now, the path of least resistance remains downward.
Frequently Asked Questions (FAQ)
Q: What caused the recent Bitcoin price drop?
A: The decline was triggered by a combination of profit-taking after the $109K rally, rising liquidations ($838M in 24 hours), declining user activity, and slowing institutional inflows into spot Bitcoin ETFs.
Q: How low could Bitcoin go in this correction?
A: If BTC fails to hold above $97,396, it may fall toward $95,000 and potentially test $94,474. A deeper breakdown could see prices retest the $90,000 level if selling pressure persists.
Q: Are declining active addresses a major concern?
A: Yes — a 17.86% drop in active addresses suggests reduced network usage and weaker organic demand, which historically correlates with extended consolidation or bearish phases.
Q: Can spot Bitcoin ETFs reverse this trend?
A: Only if inflows resume at previous levels. With weekly inflows dropping from $1.76B to $517M, institutional support appears to be cooling — limiting upward momentum.
Q: What technical indicators confirm bearish sentiment?
A: Key signals include breaking below the 200-EMA, RSI dropping to 25.93 (oversold but bearish), and an imminent death cross (20-EMA below 50-EMA).
Q: Is this a buying opportunity?
A: Some long-term investors may see value near $94K–$90K, but traders should wait for confirmed bullish reversal patterns and rising volume before entering new positions.
Bitcoin’s current downturn reflects a confluence of technical weakness, declining participation, and fading institutional momentum. While past rallies were fueled by ETF inflows and political optimism, today’s market is grappling with reality checks across multiple fronts.
For traders and investors alike, monitoring liquidation trends, on-chain activity, and ETF flows will be crucial in navigating the coming weeks. Volatility remains high — and opportunities exist on both sides of the market.
Keywords: Bitcoin price analysis, BTC market crash, crypto liquidations, Bitcoin active addresses, spot Bitcoin ETFs, BTC technical analysis, cryptocurrency market correction