The low crypto trading volume, only experienced before the November 5, 2024 US elections, has threatened the bullish sentiment for Bitcoin in the near term.
Bitcoin price BTC $105 849 24h volatility: 0.4% Market cap: $2.11 T Vol. 24h: $29.75 B has continued to experience low bullish momentum in the third week of January 2024 ahead of the second inauguration of US President-elect Donald Trump. The flagship coin has dropped more than 6% in the past seven days to tease below $93K at the time of this writing.
Despite the rising bearish volatility, only $313 million was liquidated from the crypto-leveraged market, with the majority involving long traders. As a result, market intelligence platform Santiment concluded that the cryptocurrency industry is experiencing trading paralysis, amid greed of potential rebound.
Top Reasons Why Bitcoin Price Dropped Today
Bitcoin price has experienced low demand from whale investors as retail traders flee from the choppy crypto market. According to on-chain data analysis, Bitcoin’s network activity has dropped to its lowest level since November 2024, with around 667,100 active addresses.
The number of large transactions on the Bitcoin network has dropped by around 51% over the past month, from 33,450 to 16,180. The significant reduction in whale activity was evident when the US spot BTC ETFs registered a net cash outflow of $149 million last Friday, led by BlackRock’s IBIT, which has been a major purchaser of BTCs.
The fear of the upcoming inauguration of President-elect Donald Trump turning into a sell-the-news event has caused bearish crypto sentiments. Furthermore, crypto investors have been speculating for the past year on the re-election of Trump, which was confirmed through the 2024 elections.
Worth noting that the overall supply of Bitcoin on centralized exchanges increased by around 2,729 in the past 24 hours to hover around 2.19 million at the time of this writing. The overall BTC futures open interest (OI) has lost $6 billion in the past few days to hover around $60 billion, signaling potential correction ahead.
Midterm Targets
According to a well-seasoned trader Peter Brandt, Bitcoin price has been forming a head and shoulders (H&S) pattern after experiencing a heightened resistance level of around $100K. Furthermore, the daily Relative Strength Index (RSI) has been forming a falling divergence in the past few weeks.
Brandt, however, argued that BTC price must consistently fall below the neckline of the H&S pattern, around $92K, to confirm the reversal pattern. In the case of H&S pattern confirmation, Brandt expects Bitcoin price to drop as low as the range between $75K and $77.5K.
The trader also noted that BTC price could be forming a bear trap, with a rebound likely to happen around $92K. In such a situation, Brandt believes that Bitcoin price will be well positioned to rally towards a peak of between $125k and $150k in the second half of 2025.
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