Original text: Biraajmaan Tamuly, Cointelegraph
Compiled by: Yuliya, PANews
Bitcoin (BTC) price fell again on Jan. 8, forming a bearish engulfing candlestick pattern on the daily chart. This intraday drop was BTC’s second-largest drop in nearly 19 weeks.
Amid uncertainty surrounding market dynamics, Bitcoin traders and commentators offered their insights on a possible correction below $90,000.
Stablecoin supply enters the "price discovery" stage
Data from the U.S. Bureau of Labor Statistics showed that job creation reached 8.1 million at the end of November, higher than the expected 7.74 million. This data showed that the U.S. economy is improving, causing the stock market and cryptocurrency market to weaken, and Bitcoin immediately crashed from $102,760 to $92,500.
While this development has sparked broader bearish expectations, cryptocurrency analyst Miles Deutcher noted that stablecoin supply has entered the "price discovery" phase, meaning there is more liquidity available in the current crypto ecosystem. The increase in stablecoin supply suggests that more funds may flow in in the coming months.
Market analyst Jamie Coutts holds a similar view, believing that more liquidity will flow in, which may lead to higher BTC prices in six months. Based on the strength of the US dollar, Coutts said that Bitcoin could have fallen to $80,000, but the potential strength of BTC market buying shows that market expectations are still high.
The current bull run has shown more liquidity compared to previous bull runs. Data analyst Roman Zinovyev recently highlighted that the USD volume of Binance spot markets has gradually increased since 2020. As shown in the chart, the Americas market share reached an all-time high of 42% during the 2024-2025 period.
Does On-Chain Data Point to a Bitcoin Rally?
Strong on-chain developments do not negate the fact that Bitcoin’s 5.15% drop wiped out four days of gains. The probability of an immediate rebound after a drop of 5% or more is also not optimistic.
As shown in the figure, Bitcoin has experienced 15 pullbacks of 5% or more since January 2024. Of these 15 times, BTC has only rebounded immediately 3 times, which is only a 20% probability. Therefore, from a probability perspective, it is unlikely that BTC will see a strong rise immediately.
Cryptocurrency trader Krillin mentioned that Bitcoin could accumulate between $92,000 and $90,000 in January before seeing a market pullback in the coming month.
Jelle, a cryptocurrency and stock investor, expressed a similar view after market buying failed to keep BTC above $100,000. The investor expects lows near $90,000 to be hit, saying: "Back to the original plan; wait for the lows to be hit before making new highs."
A deeper Bitcoin plunge could occur if there is a daily close below $90,000. Such a level would confirm an inverse head and shoulders pattern, which could have serious consequences. For example, BTC could fall further by 20% with a price target of $71,500.
