Edited by Matt Waller
Recent market turbulence has seen Bitcoin (BTC) teetering below the $88K mark, as a combination of low whale demand, heavy profit-taking, and mounting geopolitical pressures trigger widespread crypto liquidations. Over the past 24 hours, more than $1.3 billion has been liquidated across the crypto market, primarily impacting long positions in both BTC and Ether. With several US states rejecting strategic Bitcoin reserve proposals and US spot BTC ETFs bleeding capital, market sentiment has turned notably bearish—even as many experts see this as a potential setup for a 2025 bull rally.
Key Points
- Price Decline: BTC has fallen over 7% in the last two days, dipping to as low as $87.7K on some centralized exchanges.
- Technical Breakdown: The breach of the crucial $91K support level and retesting of a weak liquidity area around $89.3K suggest further downside risks.
- Liquidation Frenzy: Over $1.3 billion in crypto liquidations have been recorded, with more than 362K traders affected, including a $20 million single liquidation on Binance.
- Whale Exodus: On-chain data indicates that whale investors are aggressively taking profits, increasing BTC supply on centralized exchanges by 17,185 coins (totaling 2.22 million over the past week).
- ETF Woes: Demand for US spot BTC ETFs has significantly declined, with net cash outflows of approximately $516 million observed recently.
- Institutional Moves: Despite broader selloffs, players like Strategy (NASDAQ: MSTR), El Salvador, and Metaplanet Inc. are continuing to accumulate BTC.
- Geopolitical Impact: The ongoing US-led tariff wars and broader macroeconomic uncertainties are pressuring BTC demand, pushing investors toward safe-haven assets like gold.
- Bull Cycle Outlook: Analysts predict that once BTC finds a solid bottom, the 2025 crypto bull rally could be ignited by returning whale investors and potential inclusion in the US Sovereign Wealth Fund.
A Stormy Phase for Bitcoin
Bitcoin, the flagship cryptocurrency, is currently navigating a period of sharp price volatility and low liquidity. After struggling to maintain its support above $95.5K, BTC has recently teetered below critical levels, triggering alarm bells among traders and institutional investors alike. With the price dropping by over 7% in just two days and consistently failing to hold above the pivotal $91K level, the market is now in a state of flux. This turmoil comes on the heels of disappointing news from several US states rejecting strategic Bitcoin reserves, which sent shockwaves across the crypto ecosystem.
The confluence of these events has resulted in substantial market liquidations and a noticeable shift in investor behavior. While many see this as a harbinger of further decline, seasoned analysts argue that such conditions historically precede a period of consolidation and eventual accumulation—potentially laying the groundwork for a bullish turnaround later in 2025.
Technical Analysis: Signs of a Potential Breakdown
Critical Support Levels Under Pressure
Bitcoin has struggled to maintain its critical support above $95.5K, and the recent breach of the $91K level is a key warning sign for traders. Current price action is characterized by BTC retesting a weak liquidity area around $89.3K.
From a technical perspective, if Bitcoin consistently closes below $91K over the coming weeks, it could confirm a reversal pattern marked by double tops near $108K and a bearish divergence on the Relative Strength Index (RSI). In such a scenario, a slide toward the next major support at around $77K seems inevitable.
Oversold Conditions and RSI Indicators
The monthly RSI has yet to rally above 90%, a level that often signals the end of a bull cycle. Currently, the RSI indicates that Bitcoin is oversold, which might attract short-term buyers looking to capitalize on the dip. However, given the prevailing market sentiment and technical breakdown, any recovery will likely require a strong and sustained influx of buying pressure.
Liquidation Frenzy: Over $1.3B Wiped Out
Massive Liquidations Across the Market
In the wake of heightened volatility, the crypto market has seen over $1.3 billion in liquidations in the past 24 hours alone. This liquidation wave has predominantly impacted long traders in BTC and Ether markets, with more than 362,000 traders affected. The largest single liquidation order—amounting to $20 million in BTC/USDT—was recorded on Binance, underscoring the intensity of the selloff.
Impact on Market Dynamics
These liquidations not only exacerbate short-term downward pressure on Bitcoin’s price but also reflect a broader trend of investor panic. Such sweeping liquidations can lead to a cascading effect, where forced selling drives prices even lower, further triggering stop-loss orders and margin calls. This feedback loop is particularly concerning for a market already under stress from low whale demand and external macroeconomic pressures.
Whale Investor Behavior: Profit-Taking in Action
On-Chain Data Insights
According to data from IntoTheBlock, over 87% of Bitcoin holders are currently in profit, prompting many whale investors to accelerate their profit-taking strategies. In the past seven days, the overall supply of BTC on centralized exchanges has increased by approximately 17,185 coins—bringing the total to about 2.22 million coins. This surge in supply is a clear indicator that large investors are choosing to lock in gains rather than continue holding through the volatility.
Shifting Sentiment Among Large Investors
The mass exit by whale investors is particularly noteworthy because these entities typically have a stabilizing influence on the market. Their retreat suggests a lack of confidence in the short-term outlook, driven by geopolitical uncertainties and a deteriorating macroeconomic landscape.
However, historical cycles indicate that once the panic subsides, these same investors often return to accumulate at lower prices—potentially setting the stage for the next bull run.
ETF Dynamics and Institutional Shifts
Declining Demand for US Spot BTC ETFs
The market for US spot BTC ETFs has recently experienced a significant downturn. Over the past three weeks, there has been a notable net cash outflow of approximately $516 million, led by major players like BlackRock’s IBIT and Fidelity’s FBTC. This decline in ETF demand has contributed to the broader bearish sentiment and reduced the inflow of institutional capital into Bitcoin.
Contrasting Accumulation Strategies
Despite the overall retreat, some institutional entities remain bullish. Companies such as Strategy (NASDAQ: MSTR), along with national players like El Salvador and Metaplanet Inc., continue to accumulate Bitcoin. Metaplanet, for example, recently acquired 135 BTC for $13 million, pushing its holdings to 2,235 BTC. These strategic moves suggest that while many institutional investors are fleeing due to uncertainty, others are seizing the opportunity to build positions at discounted levels.
Macro and Geopolitical Influences: The Broader Economic Impact
US-Led Tariff Wars and Global Supply Chain Concerns
One of the underlying catalysts for Bitcoin’s recent price decline is the US-led tariff wars, which have intensified geopolitical tensions and disrupted global supply chains. These macroeconomic uncertainties are negatively impacting demand for riskier assets like Bitcoin, driving both institutional and retail investors to seek safer havens.
Flight to Gold and Shifting Investor Preferences
Amid the current volatility in the crypto markets, there has been a noticeable shift towards traditional safe-haven assets. Central banks and institutional investors are increasingly flocking to gold, which recently recorded a new weekly all-time high (ATH) since the beginning of this year. This migration away from digital assets further compounds the downward pressure on Bitcoin, as capital that might have supported the crypto bull cycle is now diverted to more stable assets.
Future Outlook: Preparing for the 2025 Crypto Bull Cycle
Establishing a Solid Bottom
Many analysts believe that the current downturn, while painful, could represent a temporary phase within a larger bull cycle. Historical patterns suggest that once Bitcoin establishes a solid bottom—potentially at or near the $77K support level—the market could see a significant reversal. The anticipated 2025 crypto bull rally is expected to materialize once a stable floor is set and confidence is restored among long-term investors.
Return of Whale Investors and Institutional Reaccumulation
A key driver for the upcoming rally will be the return of whale investors. As macroeconomic uncertainties ease and regulatory clarity improves, these large investors are likely to resume their accumulation strategies. Additionally, the potential inclusion of Bitcoin in the US Sovereign Wealth Fund could provide a powerful catalyst, injecting a fresh wave of institutional capital into the market.
Technical and Sentiment Indicators
From a technical standpoint, the end of Bitcoin’s four-year bull cycle has been signaled by the monthly RSI, which is beginning to rally above 90%—a phenomenon not seen in the past two years. Should Bitcoin manage to hold above critical support levels, and if bullish reversal patterns (such as double tops around $108K) emerge, the stage could be set for a robust recovery that propels the price back towards—and eventually above—the $4,000 threshold in the broader crypto market.
Conclusion: A Pivotal Moment for Bitcoin
Bitcoin’s recent slide below $88K amid low whale demand and massive liquidations marks a critical juncture in the ongoing crypto cycle. The interplay of technical breakdowns, large-scale profit-taking by whale investors, and a retreat from US spot BTC ETFs has created a challenging short-term environment. However, history has shown that such periods of distress often precede significant market rebounds.
As institutional investors reassess their strategies and macroeconomic uncertainties begin to dissipate, the groundwork for the 2025 crypto bull rally could be laid. With the potential return of whale accumulation and the strategic inclusion of BTC in major investment vehicles like the US Sovereign Wealth Fund, Bitcoin may soon transition from a phase of consolidation to one of renewed growth. For now, investors are advised to closely monitor key support levels, technical indicators, and broader market sentiment to navigate this turbulent period effectively.