Wednesday’s rally represented the strongest attempt since the sharp sell-off on February 5 to reclaim the $70,000 mark. However, no clear breakout occurred. This movement reflects not only a technical rejection but also the limited expansion of liquidity. Stablecoin supply remains stagnant; thus, significant new capital inflows are still not evident. Price attempts to move upward, yet underlying capital flows are not growing at the same pace.

Altcoin Strength Evident

While BTC slowed, altcoins showed a more vibrant performance. Ether rose about 8.5%, Solana gained 6.9%, and Cardano increased over 10%. Dogecoin also posted strong gains. Bitcoin’s roughly 4% increase was one of the lowest among the top 10 coins.

This divergence typically signals expanding risk appetite. After February’s forced selling, margin pressure eased, allowing investors to shift toward higher-beta assets. Market behavior shows a transition from Bitcoin-centered defensive positions to more aggressive plays, though it is not yet clear whether this marks a permanent trend change.

The macro picture remains complex. Global risk appetite is volatile. Technology stocks move in correlation with crypto assets. Especially, slowing momentum in AI-related equities strengthens cautious positioning toward risky assets, meaning crypto’s recovery is not fully independent of external conditions.

Why couldn’t Bitcoin surpass $70,000? Price could not rise sustainably due to limited liquidity and stagnant stablecoin supply. On the same day, altcoins such as Ether, Solana, and Cardano remained strong thanks to high-beta movements, signaling renewed investor appetite. Why is the $60,000 level critical? This threshold could trigger gradual liquidation and sell-off risks; if breached, price could drop toward $50,000–$55,000, or even $47,000. Short-term, slowing sell pressure supports a technical rebound, but medium-term fragility remains.

$60,000 Critical Threshold

Short-term risks remain present. On-chain analytics firm CryptoQuant reports that selling pressure on Binance has slowed recently, indicating reduced downside momentum and stronger odds of a short-term technical rebound.

However, Bitrue warns that if Bitcoin falls below $60,000, gradual liquidations could accelerate. In such a scenario, $50,000–$55,000 would be the first support range, with a potential move toward $47,000 if selling pressure intensifies.

In conclusion, the market exhibits two simultaneous dynamics. Short-term risk appetite in altcoins is rising, while medium-term fragility is tied to critical support levels. Bitcoin has yet to break through the $70,000 resistance; sustainable breakout requires not only technical momentum but stronger liquidity support. Upcoming changes in volume and capital flows will be decisive.

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Data shows that since December 23, roughly 69,000 BTC in net realized losses have been recorded on-chain. This marks a clear departure from the profit-taking environment that dominated most of 2024 and 2025. Instead of distributing coins at a gain during price rebounds, investors are now choosing to crystallize losses.

A Quiet Shift in On-Chain Behavior

CryptoQuant emphasizes that this transition cannot be explained by price action alone. In fact, weakness in profit realization has been building for some time. On-chain metrics indicate that Bitcoin holders are stepping away from profitable distribution and prioritizing risk reduction instead. Historically, similar behavioral shifts have emerged when market conviction weakens and price recoveries fail to sustain momentum.

What stands out in the current phase is the absence of panic selling. Selling pressure is developing gradually rather than explosively. This suggests that while market participation remains active, confidence in directional continuation is eroding.

Signs of Fatigue in Profit Momentum

CryptoQuant data shows that realized profit momentum has been steadily deteriorating since early 2024. Rather than a single breakdown point, the market has produced a sequence of progressively lower realized profit peaks—first in January 2024, followed by December 2024, July 2025, and most recently October 2025.

This pattern reveals that even when spot prices appear resilient, each rally generates less profit-taking than the previous one. From an on-chain perspective, this reflects declining willingness among buyers to absorb supply at higher price levels, signaling weakening demand strength.

Parallels With the 2021–2022 Market Transition

CryptoQuant analysts note that the current on-chain structure bears striking similarities to BTC 2021–2022 bull-to-bear transition. During that cycle, realized profits peaked in early 2021 and then formed lower highs throughout the year before flipping into net realized losses ahead of the 2022 bear market.

That loss realization phase coincided with a broader psychological shift—from optimism toward capital preservation—and unfolded alongside a prolonged market decline. While history does not repeat mechanically, CryptoQuant frames the resemblance not as a forecast, but as a structural warning signal.

Where Is Market Balance Headed?

CryptoQuant stresses that net realized losses alone do not guarantee an immediate price collapse. However, in past cycles, extended loss realization phases have typically aligned with weaker market sentiment and diminishing speculative appetite.

If the current trend persists, Bitcoin rallies may increasingly encounter selling pressure, while downside volatility becomes more visible as the market searches for a new equilibrium. The direction remains unresolved, but on-chain data suggests the market is operating under noticeably tighter conditions than before.

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Demand Waves And Market Movements

CryptoQuant analysts highlight three major demand waves in this cycle. The first wave followed the US Bitcoin ETF launch in January 2024, the second came after the 2024 US presidential election, and the third was driven by the Bitcoin Treasury Companies bubble. Analysts note:

“The Bitcoin demand boom is fading. This cycle ran on three major spot demand waves, and the latest one appears to be rolling over. Since early October, demand has been below trend, which can remain bearish for price.”

Institutional Demand Declines

Institutional investor interest is also contracting. In Q4 2025, Bitcoin ETFs saw holdings drop by approximately 24,000 BTC, sharply contrasting the strong accumulation in Q4 2024. Funding rates for perpetual futures have fallen to their lowest levels since December 2023, further reinforcing bearish signals.

Bitcoin’s price structure has broken below the 365-day moving average, a key dynamic support level. Analysts warn that this breach strengthens the likelihood of a bear market.

Potential Downside Levels

Analysts note that historically, Bitcoin bear market bottoms align with realized price levels. Current estimates place this level around $56,000. This implies a potential drawdown of about 55% from the recent all-time high, one of the smallest declines on record. Intermediate support is expected around $70,000. Analysts emphasize that these levels serve as guidance, and the market can always produce surprises.

Future Outlook And Market Sentiment

Some analysts remain optimistic for 2026, but overall market sentiment remains in “fear” territory. Falling interest rates, potential increases in demand, and risk asset catalysts may provide support. The Crypto Fear and Greed Index from CoinMarketCap shows investor sentiment firmly in the fear zone.

US monetary policy remains uncertain. CME Group’s FedWatch tool shows only 22.1% of investors expect the FOMC to cut rates in its January meeting. Political developments are also influential; US President Donald Trump reportedly pressured Fed Chair Jerome Powell to lower rates in 2025, and with Powell’s term ending in May 2026, potential replacements are expected to favor rate cuts.

Why It Matters?

Falling demand, institutional outflows, and broken technical support could shape Bitcoin’s trajectory in the coming months, directly influencing investor strategies and market risk appetite.

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At the end of October 2024, Bitcoin’s price dropped below $112,788, pushing these new holders into losses for the first time in a year. This transition raises questions about whether they can withstand market pressure as older whales offload holdings.

Whale Realized Cap Signals a Power Shift

The Realized Cap measures Bitcoin’s total value based on the last on-chain transaction price for each coin. The Whale Realized Cap reflects the capital invested by large holders owning over 1,000 BTC.

Data from CryptoQuant shows that new whales’ share of the realized cap has risen sharply. However, for the first time since October 2023, these new whales now have a negative Unrealized Profit Ratio — meaning their average entry price of $112,788 is higher than the current BTC price of $110,196.

Meanwhile, older whales who accumulated Bitcoin at lower prices remain profitable, giving them greater resilience during downtrends and potentially adding selling pressure if new whales panic.

Selling Pressure and Market Psychology

This ongoing distribution from old whales to new whales could intensify selling pressure if sentiment weakens further. Historically, such transitions — where experienced holders sell to newer investors — have preceded deeper market corrections.

Open Interest across futures markets has declined, signaling weaker trader confidence. Lower participation means reduced volatility in the short term but also indicates uncertainty among investors about BTC’s near-term direction.

If new whales start selling to cut losses, Bitcoin could face additional downside. Conversely, if they hold through current levels, the market might find stability soon.

What to Watch Next

Analysts highlight three key signals to monitor:

• New whale behavior — large sell-offs could push BTC below $100,000.

• Long-term holder activity — renewed accumulation could stabilize the market.

• Futures Open Interest — a rebound could mark a short-term recovery trend.

The next few weeks will reveal whether this new generation of whales has the same conviction as their predecessors — a factor that could shape Bitcoin’s trajectory into 2025.

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Binance Leads in Liquidity and Bitcoin Investments 

According to CryptoQuant data, Binance is three times larger than its closest competitor, OKX exchange. OKX’s stablecoin reserves stand at only $8.20 billion, or 15.39%. This indicates that the majority of digital currency trading takes place on Binance. 

Furthermore, as of 2025, Binance has surpassed all other exchanges with inflows totaling $180 billion. This data reflects increased trust in the exchange and signals a possible bull market. This liquidity growth may support the next upward market movement. 

High inflows also indicate a rising user base and increased trading volume. Additionally, institutional investors are believed to be turning to Binance. Binance receives more average Bitcoin (BTC) investments than any other exchange, proving users trust Binance’s infrastructure for BTC transactions. 

Binance Maintains Strength Despite SEC Pressure 

Compared to other major exchanges, Binance’s dominance is striking. Coinbase’s stablecoin reserves are $5.33 billion, Bybit’s $2.73 billion, and MEXC’s $2.24 billion. However, despite past investigations by the U.S. Securities and Exchange Commission (SEC), Binance has not lost its leadership. The recent dismissal of the SEC’s lawsuit against Binance was a significant development for the sector. 

Leading crypto exchange views this process as a turning point and focuses on growth. CEO Richard Teng called on the community to “focus on building.” According to him, innovation, not speculation, is essential to lead in crypto. 

Whether Coinbase, OKX, and Kraken can compete with Binance remains uncertain. For now, Binance’s market dominance continues undisputed. 

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