The price of Bitcoin (BTC) experienced another drop on January 8, forming a bearish engulfing candlestick pattern on the daily chart. This intraday decline marked the second-largest drop for BTC in nearly 19 weeks.
Amid uncertain market dynamics, Bitcoin traders and analysts have shared insights on potential corrections below $90,000.
Stablecoin Supply Enters "Price Discovery" Phase
Data from the U.S. Bureau of Labor Statistics revealed that job creation reached 8.1 million by the end of November, surpassing the expected 7.74 million. This indicates an improving U.S. economy, which weakened stock and cryptocurrency markets, causing Bitcoin to plummet from $102,760 to $92,500.
While this development triggered broader bearish expectations, crypto analyst Miles Deutcher noted that stablecoin supply has entered a "price discovery" phase, signaling increased liquidity in the crypto ecosystem. A rise in stablecoin supply suggests potential future capital inflows.
Market analyst Jamie Coutts shares a similar view, predicting more liquidity inflow that could drive BTC prices higher in six months. Based on dollar strength, Coutts suggested Bitcoin could have dipped to $80,000, but strong market buy orders indicate sustained high expectations.
Compared to previous bull markets, the current cycle has shown greater liquidity. Data analyst Roman Zinovyev recently highlighted that Binance's spot market USD trading volume has steadily grown since 2020. The Americas' market share reached a record 42% during 2024–2025.
Does On-Chain Data Suggest a Bitcoin Rebound?
Despite strong on-chain developments, Bitcoin's 5.15% drop erased gains from the previous four days. The probability of an immediate rebound after declines of 5% or more remains low.
Historical data shows Bitcoin has experienced 15 pullbacks of 5% or more since January 2024. Of these, BTC saw only three immediate rebounds—a 20% probability. Statistically, a rapid upward surge is unlikely.
Crypto trader Krillin speculated Bitcoin might accumulate between $92,000 and $90,000 in January before a market uptick next month.
Investor Jelle echoed this sentiment after failed buy-side momentum above $100,000, anticipating lows near $90,000: "Back to the original plan—wait for the low before new highs."
A daily close below $90,000 could trigger a deeper crash. Such a level would confirm an inverse head-and-shoulders pattern with severe implications—potentially a 20% drop to $71,500.
FAQs
What caused Bitcoin's recent price drop?
The drop followed strong U.S. job data, which strengthened the dollar and weakened risk assets like cryptocurrencies.
How does stablecoin supply affect Bitcoin's price?
Increased stablecoin supply signals higher liquidity, often preceding capital inflows into crypto markets.
Is a Bitcoin rebound likely soon?
Historical trends show only a 20% chance of immediate recovery after 5%+ declines, suggesting consolidation may continue.
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