Bitcoin price against the US dollar drops below 93,000, triggering a series of liquidations revealing a market liquidity crisis

The cryptocurrency market started the week with setbacks, as Bitcoin quickly lost key support levels after multiple shocks. Falling from above $95,000, it eventually broke below the round number of $93,000. The rebound driven by derivatives has clearly lost momentum. As of the latest data, Bitcoin’s USD price has fallen back to around $90,110, with a decline of over 2% in just three days, reigniting market anxiety.

This correction not only exposes the fragile nature of the market fundamentals but also leaves a deep imprint on the data layer. The battle between institutional investors and retail traders is clearly reflected in liquidation data, as market participants reassess Bitcoin’s future trajectory.

Behind the $860 Million Liquidation Wave: Long Concentration and Short Squeeze Risks

The intense volatility in the derivatives market is at the forefront. According to CoinGlass data, Bitcoin’s rebound from the $95,000 to $97,000 range failed, with over $860 million in positions forcibly liquidated in the past 24 hours, including $780 million from long positions.

This data hints at an inherent structural issue: excessive concentration of bullish bets. When prices reverse, a chain reaction quickly triggers long liquidations, exacerbating the downward move. This round of correction vividly illustrates this fragile structure—when support wanes, the market can easily fall into a self-reinforcing downward spiral.

Meanwhile, geopolitical risks are also adding fuel to the fire. Gold prices hit new highs, up 1.7%, surpassing $4,600 per ounce, reflecting a reallocation of investors toward safe-haven assets. The US has imposed a 10% tariff on Denmark and several European countries, and has threatened not to withdraw measures until a “comprehensive acquisition agreement with Greenland” is completed. Such policy uncertainties directly increase market risk appetite decline.

Weak Rebound Led by Derivatives: Spot Market Lacks Support

Chain analysis firm Glassnode’s weekly report reveals an awkward fact: Bitcoin’s previous attack toward $96,000 was largely a “mechanical” push—relying on derivatives funding flows and short squeeze forced covers, rather than organic buying from the spot market.

Futures market liquidity remains relatively sparse. Once forced buying pressure diminishes, the price can reverse sharply. Glassnode highlights a key resistance zone: the “supply cluster” accumulated by long-term holders near the cycle high, which has repeatedly suppressed recent rebounds.

This indicates that the intrinsic momentum for Bitcoin’s USD price to rise is insufficient, and the market remains highly dependent on liquidity and leverage factors. Once these external forces weaken, the price falls into a passive state.

Is This a Bear Market Rebound or the Start of a Bull Market? Diverging Views from Multiple Institutions

Regarding the outlook, analysis firm CryptoQuant remains cautious. It considers the recent trend since late November more like a potential bear market rebound rather than the start of a new bullish cycle.

The key indicator is that Bitcoin is still below the 365-day moving average (around $101,000)—a line traditionally seen as the dividing line between bulls and bears. Although recent demand has improved somewhat, CryptoQuant emphasizes that the overall structure has not undergone a substantial change: spot demand is still shrinking, and capital inflows into US Bitcoin spot ETFs remain weak.

This divergence reflects fundamental uncertainty about Bitcoin’s future direction. Technical and fundamental signals have yet to reach a consensus, leaving investors oscillating between “rebound opportunities” and “downside risks.”

Bottoming Signals Emerge: Long-term Holders Slow Selling, Spot Funds Reflow

However, signs of optimism are also emerging amid the gloom. Glassnode observes that compared to the end of 2025, the selling speed of long-term holders has significantly slowed—usually indicating that rational market participants have completed adjustments and are beginning to bottom fish.

More critically, spot capital flows on major exchanges like Binance have shifted from sellers to buyers, and selling pressure from Coinbase is easing. These micro signs suggest the market is quietly bottoming out, with the balance of power gradually tilting toward institutional and long-term participants.

Options markets also reflect this shift. Although implied volatility remains low, downside protection in long-term contracts persists, indicating that investors’ caution toward potential risks has not fully dissipated.

Conclusion: Liquidity-Sensitive Period Approaching

Both Glassnode and CryptoQuant agree that before sustained spot demand truly returns, Bitcoin’s USD price will be highly sensitive to leverage and liquidity changes. The market remains in a delicate phase, with short-term volatility risks not to be underestimated.

Investors need to stay alert within this range, closely monitoring spot capital flows, long-term holder behavior, and institutional allocations. The next direction for Bitcoin’s USD price ultimately depends on whether the spot market can take over from derivatives and become the endogenous driver of the trend.