The price of Bitcoin ($BTC) dropped suddenly beneath the all-important level of $100,000, inciting intense market action.
Over the last day, long liquidations across exchanges amounted to $68 million. This makes one of the sharpest and most remarkable price movements in a while—certainly the most notable for October so far. “The market has become extremely volatile,” noted one analyst.
As $BTC‘s price fell below $100K, long liquidations surged. In the past 24 hours, a total of $68M worth of longs were liquidated across exchanges, making it one of the most notable events recently: https://t.co/vmxHItMnSa pic.twitter.com/b8pdhwESM6
— glassnode (@glassnode) January 27, 2025
The long liquidations of Bitcoin over a 24-hour period amounted to nearly $3 million, placing this event as the trio’s third-largest long liquidation within the past quarter of a year. Liquidation means forced selling of an asset, which in this case refers to Bitcoin, that’s being held by near-sighted investors who have bet on the price going up.
Since Bitcoin’s recent pinnacle of $108,000 on January 20, 2025, the market has entered a choppy and corrective phase. This downward trajectory has run its course and culminated in the current descent to $98,000. But as pullbacks go, this one is not your father’s Bitcoin correction. The severity of unrealized losses remains muted when compared to earlier price declines.
Since the recent #Bitcoin peak at $108k on January 20th, the market has entered a choppy pattern, culminating in today’s correction to $98k. During this move, the total supply in loss, denominated in USD, has risen by $187B: https://t.co/G4nFVJV79k pic.twitter.com/JszYJVUm0F
— glassnode (@glassnode) January 27, 2025
Analyzing the Current Bitcoin Correction
Push the recent market downturn, and the total USD-denominated supply in loss has increased by $187 billion. While pushy, this number is 43 percent lower than the figure we had in mid-January. In fact, it is significantly below most of our recent bear periods and suggesting that, while we are correcting, we are doing so with a lot less in unrealized losses than we have seen lately. In other words, this resilient push isn’t pushing us down into the lows we had in January.
The activity in Bitcoin options markets adds another layer of uncertainty. For January 31, 2025, the data from options shows a substantial concentration of put options with strike prices well above the current trading level of Bitcoin, namely, above $105,000.
– At $105,000: 734 BTC puts contrasted with 2,484 BTC calls.
– At $110,000: 392 BTC puts as opposed to 5,355 BTC calls.
$BTC options expiring 31 Jan 2025 show a large concentration of puts above $105K:
➡️$105K: 734 BTC puts vs. 2,484 BTC calls.
➡️$110K: 392 BTC puts vs. 5,355 BTC calls.https://t.co/jfjWVY5TJ6 pic.twitter.com/Rtz7DLkyf6— glassnode (@glassnode) January 27, 2025
What is intriguing is that at the $100,000 level, puts and calls are in relative balance, with 2,152 BTC puts and 2,645 BTC calls. This equilibrium reflects a neutral or uncertain sentiment at this key psychological level. Below $100,000, however, puts dominate in a big way, indicating that traders are placing a lot of bets on a strong downside move:
At $90,000: 2,070 BTC puts as opposed to 949 BTC calls.
– When the price hits $80,000: 1,425 BTC puts compared to 255 BTC calls.
Traders appear to consider these levels as possible support zones for Bitcoin and are getting ready for additional downside danger, given their position in the futures market.
Bitcoin Exchange Flows and Historical Parallels
Even though the market has been turbulent, flows into Bitcoin exchanges have been negative since January 21. This suggests that investors are retaining or accumulating Bitcoin. It hints that something like a long-term confidence might be developing in the digital gold, even while the short-term prospects for the market seem lousy.
Bitcoin exchange flows have been negative since the 21st of Jan, hinting at ongoing accumulation. pic.twitter.com/hiQ8K5eprQ
— IntoTheBlock (@intotheblock) January 27, 2025
Another comparison that analysts have drawn is between the current market cycle and Bitcoin’s historical performance during 2015-2018. Ali Martinez, in an analysis for Investing.com, said that he sees “striking similarities” between the current price action and the buildup just before Bitcoin went parabolic. If we’re to take any analogy from that period, it’s this: a fantastic upward price breakout in Bitcoin could occur at any moment.
#Bitcoin is showing striking similarities to the 2015-2018 cycle. Historically, it was around this point when $BTC went parabolic. pic.twitter.com/VLD8ehzj6K
— Ali (@ali_charts) January 26, 2025
Furthering the buoyancy, Bitcoin spot ETFs have seen the appearance of noteworthy net inflows over the past week (January 21-24). Bitcoin spot ETFs tallied a net inflow of $1.76 billion in this period, with BlackRock’s Bitcoin ETF (IBIT) accounting for a whopping $1.32 billion of this total. BlackRock aside, the other spot ETFs didn’t contribute too much to this recent growth. But with these figures in mind, the future of spot ESPs in the space seems a whole lot brighter.
Last week (January 21 to January 24, Eastern Time), Bitcoin spot ETFs had a weekly net inflow of US$1.76 billion. Blackrock Bitcoin ETF IBIT had a weekly net inflow of US$1.32 billion.https://t.co/YanotfbWiJ pic.twitter.com/0kQoHUbuiM
— Wu Blockchain (@WuBlockchain) January 27, 2025
Outlook and Key Takeaways
The $100,000 ceiling for Bitcoin is now a thing of the past. What dropped it and why? Was it just a market correction that was bound to happen? Or are there other factors at work? Well, liquidations and downside hedging—what’s that you ask? Let me save a longer explanation for later and instead refer you to the following list for a clearer understanding.
The uncertainty in the options market is evident, with sentiment around $100,000 that is either long or short. Investors are definitely covering their bases, though, with numerous put options providing strong downside protection at $90,000 and $80,000—levels that are likely to hold for at least the next few weeks. In this context, the historical pattern of a late-year recovery is particularly relevant. So, too, are the recent unprecedented inflows into Bitcoin ETFs.
At this moment, Bitcoin investors and traders are keeping a close watch on important support levels and the general market trend. As the latter attempts to come out of this corrective phase, it is hard to say which way things will go. The fundamentals of the Bitcoin market have not changed for the worse. Those betting against Bitcoin might want to consider the number of Bitcoin ATMs, the number of Bitcoin users, and the various companies that now accept payment in Bitcoin.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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