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Bitcoin is coming under increasing pressure as January draws to a close, with on-chain, macro, and structural signals pointing to downside risk. A sharp contraction in stablecoin liquidity, intensifying selling from US-based investors, and disruptions in mining activity have weakened market support, raising concerns that Bitcoin could slip lower if conditions do not stabilize.
The total market value of major stablecoins decreased by $2.24 billion in the last 10 days as Bitcoin experienced a downturn.
The decline combines two separate market activities as investors use their profits to leave the market through a complete exit. Investors chose to exit the crypto market instead of moving their funds into stablecoins for re-entry.
Digital asset markets depend on stablecoins for liquidity reserve. The market loses buying capacity when its supply declines, creating difficulties for the market to handle selling pressure and to recover from downturns.
The history of cryptocurrency market trends shows that stablecoin supply increases support sustained price growth through which new investors enter the market.
Current market conditions show weak demand, which will persist in the short term, and this situation will lead to additional price drops for both Bitcoin and altcoins.
The Coinbase Premium Index, which measures BTC price differences between Coinbase and other global exchanges, has reached its lowest point in a year, adding to the negative market trend.
The extremely low premium indicates that Bitcoin is being sold at a lower price on US exchanges amid continued selling from institutional and retail investors.
Bitcoin’s network fundamentals have also been impacted by a severe ice storm in the United States, which temporarily knocked a significant portion of mining capacity offline.
Bitcoin’s hash rate fell roughly 10% after a severe US winter storm forced miners to curtail power use, with the largest Bitcoin mining pool, Foundry USA's capacity, plunging nearly 60%.
With electricity costs rising and operations halted, miners face revenue shortfalls. In such scenarios, mining firms may be forced to liquidate part of their Bitcoin reserves to cover expenses.
Bitcoin is preparing for a short-term reversal above $90,000 as bulls tighten their grip following the previous week's volatility.
The Relative Strength Index (RSI) has reached 42 on the daily chart as bulls are attempting to defend crucial support levels.
The Moving Average Convergence Divergence (MACD) indicator stays below the signal line, which confirms the current downward trend.
Bitcoin remains below key Exponential Moving Averages (EMAs), the 50-day EMA at $91,470, 100-day EMA at $94,933 and 200-day EMA at $98,628, establishing a bearish market trend.
Investors will adopt a defensive approach if the price falls below $88,000, creating supply pressure that could drive BTC to its November low at $80,600.
Veteran trader Peter Brandt suggests Bitcoin must recover above $93,000 to negate the bearish outlook. If it fails, the price could decline toward $81,833 or even $66,883.
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