BTC rebounded sharply after falling below $90,000. Is this the end of the bad news or the beginning of a bear market?

मूल | ओडेली प्लैनेट डेली ( @ओडेलीचाइना )

लेखक锝淣an Zhi ( @हत्यारा_मालवो )

After a brief rebound to over $100,000 on January 7, the market took a sharp turn for the worse, with Bitcoin leading the क्रिप्टो market to fall across the board. At 22:00 last night, Bitcoin fell below 90,000 USDT, falling to a minimum of 89,256 USDT.

At the same time, Ethereum fell below 3000 USDT and plunged to 2920 USDT; SOL fell below 170 USDT and plunged to 168.8 USDT.

The total market value of cryptocurrencies also fell sharply. According to कॉइनगेको data, the total market value was US$3.27 trillion at 22:00 yesterday, down about 13% from January 7.

In terms of derivatives trading, Coinglass data shows that in the past 24 hours, the entire network has had a liquidation of $804 million, of which long orders accounted for a large proportion, amounting to $586 million. In terms of currencies, BTC had a liquidation of $165 million, while ETH ranked first with a liquidation of $205 million.

Why the sharp drop?

In fact, apart from the crypto market, all major financial markets have recently experienced a comprehensive correction. The Nasdaq index has fallen 4.15% in the past five trading days, and the Nikkei has fallen 2.8% in the past five trading days. The fundamental reason is that the non-farm data exceeded expectations significantly, supporting the Federal Reserve to slow down the pace of interest rate cuts.

The non-farm payrolls data released on January 10 showed that the seasonally adjusted non-farm payrolls in the United States in December were 256,000, significantly exceeding the market expectation of 160,000, and the highest level since March 2024. The unemployment rate was 4.1%, compared with 4.2% in November. The market increasingly expects that the Federal Reserve will only slightly cut interest rates in 2025, and the US dollar index DXY has risen accordingly , and risk markets have generally fallen.

US Dollar Index DXY

What are the expectations for a rate cut?

On January 10, according to CMEs Fed Watch , the probability of the Fed keeping interest rates unchanged in January is 97.3%, and the probability of a 25 basis point rate cut is 2.7%. The probability of maintaining the current interest rate unchanged by March is 74.0% (59.6 before the non-agricultural data), the probability of a cumulative 25 basis point rate cut is 25.4% (37.9% before the non-agricultural data), and the probability of a cumulative 50 basis point rate cut is 0.6% (2.5% before the non-agricultural data).

According to Jinshi , US interest rate futures are pricing in a possible no rate cut by the Federal Reserve this year. Traders are increasingly not betting on how much the Fed will cut rates from the current 4.25-4.50% range, which in turn boosted the dollar against most other major currencies. Against the backdrop of rising inflation and borrowing cost expectations, US Treasuries have been sold off this month, pushing up (10-year) Treasury yields and making investors more confident that the Fed may not have as much room to cut rates as previously expected.

Jack Mcintyre, portfolio manager at Brandywine Global, said that for the Fed and the market, the most critical variable is inflation. Next weeks CPI data will be even more important. (Note: CPI will be released at 21:30 this Wednesday.)

Institutional Views

Bitfinex: बाज़ार optimism about cryptocurrency regulation could limit further declines in Bitcoin

Bitfinex released a report analyzing that the reason for the decline of Bitcoin is the growing market caution, driven by the surge in US Treasury yields and the continued outflow of spot Bitcoin ETFs. It is worth noting that ETFs have seen outflows on 7 days in the past 12 trading days, with $718 million outflows in just two days, in stark contrast to the inflow of nearly $2 billion in early January.

Bitcoin has held up despite macro pressures – still up 42% since the US election – outperforming stocks, which have erased their post-election gains. However, as the Federal Reserve signals fewer rate cuts and tighter financial conditions, Bitcoin could face greater volatility in the short term. However, optimism about cryptocurrency regulation under new US President-elect Trump could still limit further downside and keep Bitcoin strong in the long term.

Analyst: Bitcoins January sell-off is a common phenomenon, and a new high may appear after a sharp adjustment

Axel Bitblaze, a cryptocurrency analyst, said that historically, Bitcoin sell-offs in January are a common phenomenon in the years after the halving, and cited the example of new highs in the market after the 2017 and 2021 sell-offs:

1. In January 2017, a year after the 2016 halving, Bitcoin plummeted 30% from $1,130 to $784. That year, the price of Bitcoin soared 2,400%, reaching an all-time high of $20,000 in December.

2. In January 2021, the next latest year after the halving, the price of Bitcoin fell by more than 25% from more than $40,000 to just over $30,000 at the end of the month. By November, the price of Bitcoin soared 130% to a record high of $69,000.

Intouch Capital Markets senior foreign exchange analyst: BTC has technical bearish signals, the next low may be around $88,000

Piotr Matys, senior foreign exchange analyst at Intouch Capital Markets, said that Bitcoin may have now formed a so-called head and shoulders pattern, which indicates that the trend is changing from bullish to bearish. Matys said that the break below $91,600, which is considered a major support level, shows that there are strong technical bearish signals for Bitcoin. Alex Kuptsikevich, chief market analyst at Fxpro, added that if bearish sentiment prevails, Bitcoins next low may be around $88,000, and there is also the possibility of a quick correction from there to around $74,000.

The debut of a U.S. ETF directly tied to Bitcoin and President-elect Trump鈥檚 outspoken support for the digital asset industry pushed bitcoin to all-time highs last year. However, that optimism has waned in 2025, with some analysts saying traders are waiting for certainty after Trump鈥檚 Jan. 20 inauguration.

Bloomberg analyst: Trump will revitalize the U.S. stock market and is not worried about Bitcoins short-term correction

Eric Balchunas, senior ETF analyst at Bloomberg, said that the biggest risk to Bitcoin is the downward trend of the stock market (also known as the baby boom market), which has both advantages and disadvantages. The good news is that Trump may spare no effort to keep the stock market rising, so I am not too worried about these short-term pullbacks.

The future is bright, but the road is tortuous

Although Bitcoin and Ethereum ETFs have recently started to see net outflows, MicroStrategy is still buying, buying, buying. Yesterday, MicroStrategy announced that it had increased its holdings of 2,530 BTC at a price of $243 million. At the same time, Nasdaq-listed companies such as Heritage Distilling और Nano Labs plan to use Bitcoin as a strategic reserve, and more large purchases may still be on the way.

On the other hand, the path of interest rate cuts in the first half of the year is set in stone from the market forecast, and the negative expectations have been digested. On January 20, Trump will be sworn in as the President of the United States. His policy orientation and final implementation will become the most critical factors affecting the trend of the crypto market.

This article is sourced from the internet: BTC rebounded sharply after falling below $90,000. Is this the end of the bad news or the beginning of a bear market?

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