The BTC pin "V reversed" after falling below $90,000. Can it continue to be bullish in the future?

Original | Odaily Planet Daily

Author｜Nan Zhi

After briefly rising above $100,000 on January 7, the market took a turn for the worse, with Bitcoin leading the crypto market down across the board. At 22:00 yesterday evening, the Bitcoin pin fell below 90,000 USDT, with the lowest falling to 89,256 USDT.

At the same time, Ethereum fell below 3,000 USDT and pinned to 2,920 USDT; SOL fell below 170 USDT and pinned to 168.8 USDT.

The total market value of cryptocurrency has also fallen sharply. CoinGecko data shows that the total market value at 22:00 yesterday was US$3.27 trillion, a decrease of approximately 13% compared to January 7.

In terms of derivatives trading, Coinglass data shows that the entire network has liquidated positions of US$804 million in the past 24 hours, of which multi-order liquidations accounted for the largest proportion, amounting to US$586 million. From the perspective of currency, BTC liquidation reached US$165 million, while ETH ranked first with a liquidation of US$205 million.

Why the sharp drop?

In fact, in addition to the crypto market, all major financial markets have experienced a comprehensive correction recently. The Nasdaq index fell by 4.15% in the past five trading days, and the Nikkei fell by 2.8% in the past five trading days. The root cause is the non-agricultural data. Significantly exceeding expectations, supporting the Federal Reserve to slow down the pace of interest rate cuts.

Non-agricultural data released on January 10 showed that the seasonally adjusted non-agricultural employment population in the United States in December was 256,000, significantly exceeding market expectations of 160,000 and setting a new high since March 2024. The unemployment rate was 4.1%, compared with 4.2% in November. The market is increasingly expecting that the Federal Reserve will only cut interest rates slightly in 2025. At the same time, the U.S. dollar index DXY rose accordingly, and risk markets generally fell.

 US dollar index DXY

What are the expectations for interest rate cuts?

On January 10, according to CME's "Fed Watch", the probability of the Federal Reserve keeping interest rates unchanged in January was 97.3%, and the probability of cutting interest rates by 25 basis points was 2.7%. The probability of maintaining the current interest rate unchanged by March is 74.0% (59.6 before non-agricultural issues), the probability of a cumulative 25 basis point interest rate cut is 25.4% (37.9% before non-agricultural issues), and the probability of a cumulative 50 basis point interest rate cut is 0.6% (2.5% before non-agricultural sales).

According to Jinshi, U.S. interest rate futures are pricing in the possibility that the Federal Reserve will not cut interest rates during the year. Traders are increasingly turning away from bets on how much the Fed will cut interest rates from the current range of 4.25-4.50%, which in turn has boosted the dollar against most other major currencies. A sell-off in U.S. Treasuries this month amid expectations of rising inflation and borrowing costs has pushed up yields on the (10-year) Treasury note and heightened investor confidence that the Fed may not have as much room to cut interest rates as previously thought.

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

institutional perspective

**Bitfinex: Optimism over cryptocurrency regulation could limit further

Bitcoin losses**

Bitfinex released a report analyzing that the reason for Bitcoin's decline was growing market caution, driven by the surge in U.S. Treasury bond yields and continued outflows from spot Bitcoin ETFs. Notably, the ETF has seen outflows in seven of the past 12 trading days, with $718 million in outflows in just two days, in sharp contrast to the nearly $2 billion in inflows in early January.

Bitcoin has held up despite macro pressures — still up 42% since the U.S. election — outperforming stocks, which erased post-election gains. However, as the Federal Reserve signals fewer interest rate cuts and tightening financial conditions, Bitcoin may face greater volatility in the short term. However, optimism about cryptocurrency regulation under new U.S. President-elect Trump could still limit further losses and keep Bitcoin in a strong position in the long term.

**Analyst: Bitcoin’s “January sell-off” is a common phenomenon, and new

highs may appear after a sharp adjustment**

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

1. In January 2017, one year after the 2016 halving, Bitcoin plummeted 30%, from $1,130 to $784. That year, Bitcoin prices soared 2,400%, hitting an all-time high of $20,000 by 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 by the end of the month. By November, Bitcoin prices soared 130%, hitting an all-time high of $69,000.

**Intouch Capital Markets senior foreign exchange analyst: BTC has a

technical bearish signal, and the next low may be around $88,000**

Piotr Matys, senior foreign exchange analyst at Intouch Capital Markets, said 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 a break below $91,600, considered a major support level, indicates "a strong technical bearish signal for Bitcoin." Alex Kuptsikevich, chief market analyst at Fxpro, added that if bearish sentiment prevails, Bitcoin’s next low could be around $88,000, with a quick correction from there to around $74,000 possible.

Last year, the debut of a U.S. ETF directly tied to Bitcoin, as well as President-elect Trump's outspoken support for the digital asset industry, pushed Bitcoin to all-time highs. However, that optimism has waned in 2025, with some analysts saying traders are waiting for certainty after Trump's January 20 inauguration.

**Bloomberg Analyst: Trump will revive U.S. stocks and is not worried

about Bitcoin’s short-term correction**

Bloomberg senior ETF analyst Eric Balchunas said that the biggest risk for 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 will likely go to great lengths to keep stocks rising, so personally I'm not too worried about these short-term pullbacks.

The future is bright, but the road is tortuous

Although Bitcoin and Ethereum ETFs have recently begun net outflows, MicroStrategy is still "buying, buying, buying." Yesterday, MicroStrategy once again announced that it had increased its holdings of 2,530 BTC at a price of US$243 million. At the same time, Nasdaq-listed companies such as Heritage Distilling and Nano Labs plan to use Bitcoin as strategic reserves, 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 has been confirmed based on market forecasts, and negative expectations have been digested. On January 20, Trump will be sworn in as President of the United States, and his policy direction and final implementation will become the most critical factors affecting the trend of the crypto market.