BTC USD price fluctuates significantly, raising concerns about the market's underlying structure

Bitcoin’s start to the week has been tumultuous, with prices consecutively breaching multiple support levels, falling from a high of $95,000 to break below the $93,000 threshold. Although this correction has not dampened market expectations for the future, it has clarified the true nature of the current rally—primarily driven by mechanical pushes from the derivatives market rather than solid support from the spot side. As the latest data shows BTC price rebounding to $89,940, the market has once again entered a state of volatility.

$860 Million Liquidation Wave, Bullish Concentration Sparks Trouble

This sharp price drop triggered a chain reaction. According to CoinGlass statistics, after Bitcoin retreated from the $95,000–$97,000 range, over $860 million in forced liquidations occurred in the past 24 hours across derivatives markets, with $780 million coming from long positions. The data clearly reflects the core issue—during the previous rebound, bullish bets were overly concentrated in a single direction. Once the price reversed, it immediately triggered a “stampede effect,” intensifying the decline.

This phenomenon reveals underlying market structural fragility. Investors’ bets are overly crowded on one side, lacking sufficient hedging and diversification, making the market vulnerable to sharp reversals with any slight disturbance.

Derivatives Fizzle, Spot Demand Absent

On-chain analysis firm Glassnode’s weekly report points to a deeper problem. The previous push towards $96,000 was largely reliant on futures and leveraged trading capital flows. These upward forces are fundamentally “mechanical”—driven mainly by forced liquidations triggered by short squeezes, rather than sustained buying from spot traders.

According to Glassnode, the liquidity depth in the derivatives market is limited. Once the wave of forced buying subsides, the price can reverse sharply. They also highlight a key technical resistance zone: a “supply cluster” accumulated by long-term holders near the cycle highs, which has repeatedly suppressed recent rebound attempts.

Bear Market Repair or New Uptrend? Institutional Views Diverge

Institutions have differing opinions on the current trend. CryptoQuant adopts a more cautious stance, viewing the recent movement since late November as more akin to a “technical correction within a bear market” rather than the start of a new bullish phase. They emphasize that Bitcoin is still below the 365-day moving average (around $101,000), a critical indicator often seen as the dividing line between bullish and bearish forces.

Although market demand has shown some improvement, CryptoQuant notes that the overall market structure has not fundamentally changed. Spot demand remains waning, and the net capital inflow into US Bitcoin spot ETFs remains weak, all suggesting that the rally lacks deep support.

Market Bottoming Signals Emerge

However, there is some light in the darkness. Glassnode observes that compared to late November, long-term holders are significantly slowing their distribution, indicating increased willingness among large investors to hold. Meanwhile, spot capital flows on major exchanges like Binance have shifted toward buyers, and selling pressure from Coinbase outflows is gradually easing. These signs collectively point to a market in the process of bottoming and stabilizing.

Options market data also reflect investor unease. Despite implied volatility remaining low, long-dated contracts still contain downside protection clauses, indicating that while investors are hopeful, they remain highly cautious.

Both analysis firms agree that before sustained spot demand truly returns, Bitcoin’s USD price will remain highly sensitive to leverage levels and liquidity changes. Investors should stay alert and cautious to avoid sudden, sharp market swings.