Bitcoin immediately formed a bearish engulfing candle after retesting $100,000, opening the door for a potential pullback below $90,000.
On January 8, Bitcoin's price dropped again, forming a bearish engulfing candle on the daily chart. This day saw the second-largest drop in BTC in 19 weeks.
As market dynamics trend toward uncertainty, Bitcoin traders and commentators have expressed their views on the likelihood of further drops below $90,000.
The supply of stablecoins has entered a 'price discovery' phase.
After the U.S. Bureau of Labor Statistics reported 8.1 million new jobs at the end of November, Bitcoin plummeted from $102,760 to $92,500. This figure is higher than the expected 7.74 million, indicating an improvement in the U.S. economy, which led to weakness in the stock and cryptocurrency markets.
While this development has sparked speculation about a broader bearish outcome, cryptocurrency analyst Miles Deutcher emphasized that the supply of stablecoins has entered a 'price discovery' phase, indicating more liquidity in the current cryptocurrency ecosystem. The increase in stablecoin supply highlights the potential for increased capital inflow in the coming months.
Similarly, market analyst Jamie Coutts stated that more liquidity will flow in, potentially leading to an increase in BTC price within six months. Based on a strengthening dollar, Coutts indicated that Bitcoin could drop as low as $80,000. However, the potential strength of BTC market bids suggests that market expectations remain much higher.
Compared to previous rebounds, the current bull market has clearly seen more liquidity. Data analyst Roman Zinovyev recently emphasized that since 2020, the USD trading volume on Binance's spot market has been gradually increasing. As shown, during the period of 2024-2025, the market share in the U.S. reached a historical high of 42%.
Does Bitcoin's on-chain data signal a recovery?
Strong on-chain developments cannot offset Bitcoin's 5.15% drop that reversed four days of bullish price action. The likelihood of a recovery immediately after a drop of 5% or more is also discouraging.
As shown, since January 2024, Bitcoin has experienced 15 pullbacks of 5% or more. Of these 15, BTC immediately rose three times, which is only 20% of the time. Therefore, from a probabilistic perspective, BTC is currently unlikely to experience an impulsive upward trend.
Cryptocurrency trader Krillin stated that the price of Bitcoin could accumulate between $92,000 and $90,000 in January, followed by a market surge in the next month.
Cryptocurrency and stock investor Jelle expressed a similar view after existing market bids failed to maintain BTC above $100,000. This investor expects the price to drop to around $90,000 and stated,
"Back to the original plan; wait for the lows to be broken before setting new highs."
If the daily closing price falls below $90,000, Bitcoin could further decline. Such a level would confirm a head and shoulders reversal pattern, which could have dire consequences. For instance, BTC might drop further by 20%, targeting a price of $71,500.
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