BTC Falls Below $90,000 Again: Is This the End of the Bull Market or a Temporary Bearish Turn? | Trader's Insight

BTC revisited the $90,000 level after 43 days, plunging once again. Market sentiment has reached an all-time low, and after six months, the fear and greed index has moved back into the fear zone and is very close to the extreme fear stage. The market lacks a true trend, and for altcoins, although each bounce of the AI Agent is strong, often seeing a doubling surge during BTC rebounds, the overall performance still shows a gradual decline, indicating poor performance. Many AI Agent tokens have experienced a "halving" or even a "knee-capping" situation after being listed on Binance.

As for BTC, with no visible real benefits from the Trump administration, following the scandal of WLFI Fund colluding with project teams for market-making, and with no strong evidence to refute the claims, WLFI Fund has also not engaged in any purchases in the past two weeks. Eric Trump, after publicly advocating for buying ETH at a dip, secretly offloaded his holdings, resembling a pump-and-dump scheme. Regarding the BTC strategic reserve issue, state governments have rejected it one after another, and the federal government keeps delaying decisions.

For other altcoins, it's even more bearish. The former Web3 concept allowed coins like MOODENG and PEPE, riding on Web2 liquidity, to attract attention but now sees Web2 personalities issuing tokens in Web3, siphoning off Web3 liquidity. The Mila pump for Libra exposed wash trading between market makers and DEXs. The entire industry seems to have turned into a dark forest run by project teams and celebrities. On-chain transactions remain sluggish, with Pump.fun's fees plummeting nearly 90% from its peak. CEXs lack a clear trend, BTC oscillates downward, and the trends of ETH and SOL are on the brink of a "precipice," with declines exceeding all gains since October. The liquidation data is horrifying.

The total market capitalization of the cryptocurrency market continues to fluctuate downward, dropping by nearly $1 trillion from its peak, a 25% decline. Many voices on social media are suggesting that the bull market is over, and the entire industry has reached its end. Is the market really this pessimistic? Or is this just a case of market sentiment causing a panic-driven drop, leading to an oversold situation? Let's see what the traders have to say.

Technical Analysis

@YSI_crypto

The reference time frame is 4H. Currently, the key point I will be watching is whether a rebound will be resisted in the gray area on the chart. If this occurs, a "lower high" will be formed, and yesterday's breakout has already produced a "lower low," indicating that the downtrend has been confirmed, presenting a descending channel. Selling on rallies in conjunction with an overbought indicator is a trend-following approach.

@CryptosLaowai

The current market situation is similar to the liquidity crisis caused by Japan's interest rate hike in August last year, both experiencing a true breakdown below a significant horizontal support level after a false breakout of the supply line, also fitting the Elliott Wave Theory's fourth wave. Currently, two possible scenarios may unfold: the first being a bounce here to around 102k-103k, followed by a correction and a direct retest of the previous high to reach 120k; the second being a bounce here to 102k-103k followed by a decline to around 80k, completing an ascending wedge pattern since August and oscillating upward, with the target also being the upper boundary of the ascending wedge.

Regardless, this is a suitable position to buy spot.

@Guilin_Chen_

Since December 17, 2024, the decline from 108353 to the present is viewed as a correction to the rally from 58946 to 108353, rather than a bearish trend reversal. The correction has gone through three stages so far:

1. 108353→89257, 3 segments; 2. 89257→109588, 3 segments; 3. 109588→now, 5 segments. It is a relatively complex combination-type correction. Considering the depth and breadth of the current correction, the likelihood of nearing a bottom has increased. The first new resistance level is in the range of 90000-91000, the second around 94500, the third around 98000, and the fourth around 100500. Bulls will need to break through progressively, with a long and arduous journey ahead.

Macroeconomic Analysis

@zerohedge

BTC has finally caught up with global liquidity. This is good news and to some extent proves that this is a true bottom, and we are now on the rise.

@Phyrex_Ni

The market sentiment is indeed very poor, with many possibilities, but in reality, it is still investors' fear of Trump's tariffs, and behind the tariffs is the Federal Reserve's monetary policy.
So ultimately, liquidity is still influencing the market. In fact, the recent positive developments have been good, and the U.S.'s support for cryptocurrency is evident. If this situation were placed 24 years ago, it should have been no problem for BTC to reach a new high again. Unfortunately, in 25 years, investors' sentiment is more focused on monetary policy, with expectations for interest rate cuts and liquidity far exceeding policy expectations.
It has always been said that the difference lies in liquidity. Many investors today are cursing Trump, believing that Trump is not even as good as Biden. Although he verbally expresses support for cryptocurrency and AI, in reality, these two sectors have recently suffered significant losses, and his tariff policy has not only increased the actual shopping pressure on the public but has also raised higher barriers for interest rate cuts.
Of course, there are also dissenting voices among some friends. Looking at it from a long-term perspective, Trump's support for cryptocurrency and AI is likely to propel these two industries even further and better, although there may be some short-term setbacks. All of this is carried out under the consideration of "America First," especially with the increase in tariffs, which is actually to reduce other countries' tariffs on the U.S. and also increase fiscal revenue to mitigate the fiscal deficit, particularly with Musk's DOGE department beginning to speak out against U.S. government agencies, possibly laying off more personnel to reduce financial pressure.

Will things continue to deteriorate next? I think it still depends on monetary policy. Everything at the moment is based on expectations of monetary policy. Friday's core PCE data is an example. Although not adjusting rates in March is already a certainty, investors still want to know whether the Fed's most closely watched data is rising or falling. I still feel that Q1's inflation data is within expectations, but when Q2 fully reflects the tariffs in the data, that will be more challenging.

Looking back at BTC's data, panic was inevitable, with a total daily turnover of nearly 210,000 BTC. However, the main group experiencing panic were still short-term holding investors, especially those with a cost above $95,000, showing signs of intensified panic. On the other hand, investors with a cost below $95,000 were actively buying. Currently, there are no signs of panic among long-term investors.
On the support side, investors holding between $93,000 and $98,000 are showing no significant signs of selling off in large quantities. Despite the intensified panic, more investors have not engaged in selling. Particularly, investors around $97,000 have not shown a significant decrease. In the last 24 hours, the decrease in BTC between $93,000 and $98,000 is around 16,000 BTC, which is not very exaggerated.

@TJ_Research01

There are indications that Global Liquidity is stabilizing, with the Black Liquidity Index rebounding. The chart below shows global liquidity leading Bitcoin's price movement by 6 weeks, and the last peak of the U.S. Dollar Index was on January 13th, almost a month and a half ago. The weakening of the U.S. Dollar Index is favorable for asset prices. Furthermore, with the CNN Fear Greed Index currently at extreme fear, the market participation index approaching extreme fear, all these data support that now is the time to increase positions.

Data Analysis

@CryptoPainter_X

As for this wave of BTC market movement, the current target of the decline is precisely the previous long liquidation area that lasted for over 3 months. The level at 85,600 is a very precise liquidation point. I have been tracking the position of long-term futures liquidity since early February, and this particular accumulation of liquidity might not be visible on other liquidation maps. The other two yellow liquidation areas are recorded starting from November 15, '24, and January 13, '25. Currently, this could be a "spot explosion" targeting leveraged longs in the futures market.

Above is the weekly chart of BTC, below is the weekly chart of the Shitcoin Market Cap Ratio. The shitcoin market does not have the same strong supply dynamics as the BTC market; however, this does not mean that the Shitcoin U Index will not fall, as there may be a liquidity transfer starting.

@MaoShu_CN

The market is experiencing a general decline, with a surge in trading volume. Currently, the active funds in the U.S. region are still not as active as those in the Asian session.
Comparing market data from Monday, the overall market is declining, with BTC leading the market decline and ETH following suit. This trend is also reflected in the market share, with BTC losing a significant portion of its dominance.
In terms of trading volume, overall activity has surged, with BTC's trading volume increasing by 3 times, followed by ETH, and then by shitcoins. The market is still anchored by BTC trading, and the activity is being transmitted accordingly: BTC → ETH → Shitcoins.
Funds held in the market have decreased by 15 billion, currently standing at 232.8 billion.
USDT: Official data shows a market cap of 142.35 billion, a decrease of 62 million from Monday. The activity of funds in the Asian-European markets has increased, but the funds are still in a net outflow state.
USDC: Data sources indicate a decrease in market cap by 887 million, with activity increasing 2.2 times. In the current situation, a considerable amount of funds are flowing out of the U.S. region as well.

The current market sentiment is leaning towards pessimism, with a decline in market cap and outflow of funds. The only optimistic aspect is that shitcoins have not been oversold but have simply followed the bearish trend, which is currently the only optimistic sign, although it is also a result of the previous excessive decline in shitcoins.

@biupa

Currently, Coinbase's BTC negative premium has reached its highest level since January 20, which was during the chaotic period when Trump took office; meanwhile, Bitfinex has maintained a positive premium throughout this decline, reaching the height of the December 27-January 2 phase's bottom (the first time since January). The last time Coinbase had a negative premium was at the top, but this time it's at the bottom; Bitfinex had positive premiums at both bottoms. The December 27-January 2 bottom saw Coinbase with a negative premium and Bitfinex with a positive premium, and this bottom (which has most likely occurred) is quite close to the December 27 bottom.