Article republished from: Yuliya
Original: Biraajmaan Tamuly, Cointelegraph
Translated by: Yuliya, PANews
Bitcoin (BTC) price dropped again on January 8, forming a bearish engulfing candlestick pattern on the daily chart. This intraday decline was the second-largest drop for BTC in nearly 19 weeks.
In the context of market dynamics tending towards uncertainty, Bitcoin traders and commentators have shared their insights on the potential correction below $90,000.
Stablecoin supply enters the "price discovery" phase
Data from the U.S. Bureau of Labor Statistics shows that job creation reached 8.1 million by the end of November, exceeding the expected 7.74 million. This data indicates that the U.S. economy is improving, leading to weakness in the stock and cryptocurrency markets, with Bitcoin subsequently crashing from $102,760 to $92,500.
While this development has triggered broader bearish expectations, cryptocurrency analyst Miles Deutcher pointed out that the supply of stablecoins has entered a "price discovery" phase, indicating that there is more liquidity available in the current crypto ecosystem. The increase in stablecoin supply suggests that more funds may flow in over the coming months.
Market analyst Jamie Coutts shares a similar viewpoint, believing that more liquidity will flow in, potentially leading to a higher BTC price in six months. Based on a strengthening dollar, Coutts stated that Bitcoin could have dropped to $80,000, but the potential strength of market buying suggests that market expectations remain high.
Compared to the previous bull market, the current bull market has shown more liquidity. Data analyst Roman Zinovyev recently emphasized that since 2020, the dollar trading volume in the Binance spot market has gradually increased. As shown in the chart, during the 2024-2025 period, the Americas market share reached a historic high of 42%.
Does on-chain data suggest Bitcoin will rebound?
Strong on-chain developments do not negate the fact that Bitcoin's 5.15% decline erased the gains made in the previous four days. The probability of an immediate rebound after a decline of 5% or more is also not optimistic.
As shown in the chart, since January 2024, Bitcoin has experienced 15 pullbacks of 5% or more. Of these 15 instances, BTC only had 3 immediate rebounds, representing only a 20% probability. Therefore, from a probabilistic standpoint, BTC is unlikely to experience a strong upward movement immediately.
Cryptocurrency trader Krillin mentioned that Bitcoin might accumulate between $92,000 and $90,000 in January and then see a market surge the following month.
Cryptocurrency and stock investor Jelle expressed a similar viewpoint after the market buy support failed to maintain BTC above $100,000. The investor expects a low near $90,000 to be reached and stated, "Back to the original plan; wait for the low to be reached before creating new highs."
If the daily close falls below $90,000, a deeper Bitcoin crash could occur. Such a level would confirm a reverse head and shoulders pattern, potentially leading to severe consequences. For example, BTC could further decline by 20%, targeting a price of $71,500.
