Bitcoin (BTC) has registered a sharp and unexpected decline as bulls showed signs of exhaustion. The flagship cryptocurrency slumped below the key $100,000 level after dropping over 5% and is trading around $99,100. The sudden drop happened without apparent reasons, although some attribute it to a market selloff sparked by the burgeoning popularity of the China-based artificial intelligence app DeepSeek. Bitcoin (BTC) Bulls Exhausted Bitcoin (BTC) bulls are showing signs of exhaustion after powering the cryptocurrency to a new all-time high last week. However, bulls failed to maintain momentum, with the price declining to $102,408. BTC’s unexpected drop triggered a wave of liquidations, with over $128 million in long positions liquidated across the crypto derivatives markets within hours. Total liquidations added up to $371 million, which included $132 million in long positions. Despite the ongoing selloff, open interest in the Bitcoin futures market remains high, crossing $64 billion. BTC’s price fluctuations highlight the battle between market optimism and uncertainty as it enters the last week of January on a bearish note. The liquidations and a substantial increase in selling pressure indicate investor caution. However, high trading volumes and open interest suggest market confidence remains high. A Crucial Week Bitcoin (BTC) has shed nearly 6% over the past two sessions, leading to a surge in liquidations. The selloff has led to BTC losing the $2 trillion market cap, as it slid to $1.9 trillion. The decline comes at a time when markets are preparing for a crucial week that can substantially impact the landscape of the crypto market. The Federal Reserve is all set to decide on interest rates on Wednesday. While most analysts expect the Fed to leave rates unchanged, Fed Chair Jerome Powell’s speech after the meeting could impact market sentiment. Interest rates and BTC have become increasingly intertwined, with lower rates helping the crypto market by making it more liquid. Higher interest rates have the opposite impact on the crypto market. Thursday will see the release of the primary GDP data for the US economy. The US economy is expected to grow by 2.7% on a quarterly basis. Anything more or less than the predicted figure could trigger a sharp reaction in the market. Lastly, Friday will see the release of the core personal consumption expenditure index. BTC And Markets Face Test Of Resilience BTC’s latest drop contrasts with market expectations, especially after Donald Trump took office. BTC traders were optimistic as Trump began his second term, expecting a wave of pro-crypto actions and policies. While the president has signed off on an executive order to boost crypto, the inauguration speech failed to mention crypto, leaving many surprised and prompting investors to sell. The TRUMP and MELANIA meme coins added fuel to the fire, driving the markets up as investor enthusiasm surged, only to crash spectacularly. They also raised several ethical questions, adding more jitters to an already jittery market. Robust economic data from the US has also impacted the market. While the strong performance of traditional markets is reassuring, it diverts capital away from risk assets like BTC and other cryptocurrencies. These macroeconomic factors could substantially impact BTC . Despite the drop, market watchers remain optimistic about BTC’s long-term performance. Bitcoin (BTC) Price Analysis Bitcoin (BTC) could face a significant test that could see the price drop as low as $75,000 if it triggers a double-top bearish reversal pattern. BTC is down nearly 4% during the ongoing session, its most substantial decline since the beginning of January. Its decline could become significantly more if a double-top pattern is completed. A double top is made up of two consecutive peaks at the same price, with a trend line going through the lowest point between the peaks. If BTC fails to break and dips below the double-top neckline, a change in trend will be confirmed. Confirmation of this pattern could drive BTC below $90,000, potentially towards $75,000. However, if BTC stays above the neckline, we could see a quick recovery as it reclaims $100,000. BTC has experienced significant volatility since last weekend, rising to an intraday high of $106,552 before declining 2.07% and settling at $101,434. BTC surged to an all-time high as it hit $109,350. However, it lost momentum after reaching this level and dropped to $102,408, ultimately registering an increase of 0.96%. Buyers retained control on Tuesday despite selling pressure as BTC rose nearly 4% to $106,054. The price fell back on Wednesday, dropping 2.21% to $103,715. Volatility returned to the markets on Thursday as BTC dropped to an intraday low of $101,290 and rose to an intraday high of $106,913 before settling at $104,004. Buyers retained control on Friday as BTC rose to an intraday high of $107,038. However, it could not go beyond this point and settled at $104,874 after an increase of 0.84%. Source: TradingView Momentum waned over the weekend as BTC registered a marginal drop on Saturday. Bearish sentiment intensified on Sunday as the price dropped just over 2% to $102,665. BTC has plummeted during the current session, slipping below the $100,000 support level. The flagship cryptocurrency is down nearly 4%, trading around $99,000 after falling to an intraday low of $97,767. If sellers retain control, BTC could slip towards $90,000 and potentially trigger an even bigger drop to $75,000. On the other hand, if the price rebounds from the 50-day SMA, it could reclaim $100,000 and push towards $100,000. However, indicators paint a bearish picture. The RSI is currently sitting at 47, below the neutral zone, indicating bearish sentiment. Additionally, the MACD has also flipped to bearish, indicating that sellers have the upper hand. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
