Is Bitcoin price going to crash again?

From cointelegraph by Biraajmaan Tamuly

Bitcoin BTC$93,548 price sold off again on Jan. 8, forming a bearish engulfing candle on the daily chart. This particular daily drawdown was BTC’s second steepest fall in 19 weeks.

Bitcoin 1-day chart. Source: Cointelegraph/TradingView

With market dynamics inclining toward uncertainty, Bitcoin traders and commentators offered their insights on the possibility of further corrections below $90,000.

Stablecoin supply enters “price discovery”

Bitcoin’s flash crash from $102,760 to $92,500 unraveled after data from the Bureau of Labor Statistics indicated the creation of 8.1 million jobs at the end of November. The figure came higher than the expected 7.74 million openings, which implied an improving US economy and led to weakness in equities and the crypto market.

While this development opened speculations of a wider bearish outcome, Miles Deutcher, a crypto analyst, highlighted that the stablecoin supply had entered “price discovery,” meaning more liquidity is available in the current crypto ecosystem. An increase in stablecoin supply highlights a possible increase in capital inflows over the next few months.

Stablecoin Supply chart by Miles Deutscher. Source: X.com

On a similar note, market analyst Jamie Coutts said that more liquidity will come in, possibly resulting in a higher BTC price in six months. Based on rising dollar strength, Coutts said that Bitcoin could have been as low as $80,000. However, the underlying strength of BTC market bids indicated that market expectations remain much higher.

More liquidity has already been evident in the current bull run compared to previous rallies. Roman Zinovyev, a data analyst, recently  highlighted  that USD volumes on Binance spot markets have progressively increased since 2020. As identified in the chart, for the 2024-2025 session, America’s market share has reached an all-time high of 42%.

Binance Spot USD volumes by session. Source: X.com

Related: Why is the crypto market down today?

Does Bitcoin onchain data point to a recovery?

Strong onchain development does not nullify that Bitcoin’s 5.15% decline revoked four days of bullish price action. The probability of an immediate recovery after a dip greater than or equal to 5% is also discouraging.

Bitcoin’s >=5% dip since 2024. Source: Cointelegraph/TradingView

As illustrated in the chart, Bitcoin has suffered a 5% or higher pullback 15 times since January 2024. Out of the 15 times, BTC registered an immediate jump on three occasions, i.e., only 20% of the time. Thus, from a probability perspective, BTC is unlikely to experience an impulse uptrend right now.

Krillin, a crypto trader,  mentioned  that Bitcoin could possibly accumulate between $92,000 and $90,000 in January before a market pump in the coming month.

Jelle, a crypto and stock investor,  communicated  a similar outlook after existing market bids failed to keep BTC above $100,000. The investor expected equal lows around $90,000 to be taken and said,

“Back to the original plan; wait for the lows to be taken out before new highs.”

If a daily close occurs under the $90,000 level, a deeper Bitcoin crash can be expected. Such a level would confirm the inverse head-and-shoulders pattern, which may have dire consequences. For example, a further 20% drop might open up for BTC, with a price target of $71,500.

Bitcoin 1-day chart. Source: Cointelegraph/TradingView