Bitcoin Dips Below $90K: Caution Signaled by Key BTC Indicators

Bitcoin [BTC] has experienced a decline, falling below the $90,000 mark to reach $89,300 on January 8th. As of now, BTC is trading at $91,000 following a reaction to news regarding Morgan Stanley’s Bitcoin ETF. This dip was significant, resulting in $440 million in liquidations, with 70% of these being long positions. Notably, the Coinbase Premium Index indicates that U.S.-based investors are showing weak buying pressure, leading to a cautious overall market sentiment despite January’s positive gains.

Key Takeaways

Bitcoin's price fell below $90K, touching $89.3K.
The decline led to significant liquidations totaling $440 million.
U.S. investors display weak buying interest according to the Coinbase Premium Index.
On-chain metrics indicate a shift in investor sentiment from fearful to neutral.
Bitcoin spot ETF flows show consistent negative trends, reflecting weak demand.

Weak ETF flows and onchain data temper the bullish Bitcoin case

Weak Demand for Bitcoin: Insights from On-Chain Metrics

Bitcoin Unified Sentiment Index Source: Axel Adler Jr on X

In a recent analysis shared on X, crypto expert Axel Adler Jr highlighted the Bitcoin Unified Sentiment Index, marking a noteworthy shift in investor sentiment from fearful to neutral for the first time since November 2025. However, this change does not necessarily indicate strong optimism or purchasing pressure. Following a spike to a local resistance of $94,500, traders and short-term holders quickly took profits, suggesting a hesitation to commit to longer positions.

Conversely, signs indicate some buying power is increasing within the crypto market. AMBCrypto reported new stablecoin inflows to exchanges as a fresh year began, although these came alongside barely positive capital flows.

Bitcoin Apparent Demand Source: CryptoQuant

By examining the apparent Bitcoin demand metric to understand liquidity trends, we can better evaluate the current market conditions. In August and September of 2025, despite Bitcoin prices rallying to $124K on two occasions, the evident demand was declining, indicating a slowdown in buyer activity.

When there is positive apparent demand alongside rising prices, it typically indicates that robust buying is absorbing the older coins being released in the market. However, if this absorption process declines, the bullish trend may begin to lose traction. Apparent demand slipped into negative figures in November.

When this demand indicator stays below zero for over a month, it commonly suggests either a period of significant consolidation, like that seen in April 2025, or a potential shift towards a bear market. The latter scenario might be developing at this time.

Bitcoin ETF Flows Source: Farside Investors

Bitcoin spot ETF flows have generally shown a negative trend over the past two weeks, highlighting a lack of demand for this leading cryptocurrency. Although the month commenced with a couple of days of bullish inflows, the positive momentum failed to sustain. As vital metrics persist in reflecting limited buying interest, traders should exercise caution regarding the likelihood of further price declines.

Conclusion

As Bitcoin navigates through this market dip, it's essential for investors to stay informed about these cautionary signs. While some indicators indicate potential upside, weak demand metrics suggest that the market may need to consolidate or prepare for shifts ahead.