Bitcoin Price Predictions Based on Liquidation Data

Recent liquidation data and market sentiment suggest that Bitcoin (BTC) may be undergoing a consolidation phase around the $90,000 price point. However, caution is advised as underlying demands for Bitcoin remain weak, indicating the potential for further market adjustments before reaching higher price levels.

Key Takeaways

Bitcoin price is consolidating around $90k, indicating a possible buildup for future gains.
A recent drop of $3,000 triggered significant liquidations, primarily affecting long positions.
Bitcoin's recent net outflow of $244 million from ETFs suggests institutional interest is waning.
Weak buy support signals that a pullback may occur before further upward movement.
A retest of the $90k level is necessary for stabilization before targeting higher resistance near $95k.

Bitcoin [BTC]

Bitcoin’s Current Market Sentiment

Zooming out, it appears that the market is beginning to form a bottom. From a sentiment perspective, the market has rebounded by approximately 20 points, leaving the “fear” zone. This change is clearly visible across risk assets, with the total market seeing a rise of about 7%. In this context, Bitcoin's price stability around $90,000 appears positive and could signify a classic consolidation phase that might eventually lead to six-figure valuations.

BTC
Source: TradingView (BTC/USDT)

However, it is essential to note that expecting a straightforward upward movement may be premature. On January 6, Bitcoin's price dropped by $3,000, resulting in a long lower wick reaching close to $91,000. Consequently, there were significant liquidations, totaling nearly $440 million, with approximately 70% of these losses attributed to long positions.

Essentially, Bitcoin has not completely shaken off its volatility yet. Hence, monitoring liquidity levels is vital, and it seems that the Bitcoin price may need to procure more liquidity before a significant reversal can occur.

Caution Signals in Bitcoin's Price Action

The disparity between Bitcoin's price and its market flow is becoming increasingly apparent. On a larger scale, Bitcoin ETFs experienced a break in their inflow trend, with a net outflow of $244 million reported across five ETFs. This marks the first net outflow of 2026, indicating weak institutional demand.

Simultaneously, Bitcoin's dominance (BTC.D) has declined with three straight weeks of losses, while the total market capitalization continues to rise. This contradictory trend implies that funds are moving into alternative cryptocurrencies (alts), which may be limiting upward movement for Bitcoin prices.

Bitcoin
Source: TradingView (BTC.D)

Considering these factors, the current market setup suggests that we have not yet reached a bottom for Bitcoin. The importance of this situation cannot be overstated; weak buying support below the Bitcoin price pressures long-term traders. Although BTC has absorbed a significant portion of the downside liquidity by holding at $90k, it has not yet established a definitive base.

In light of this, a pullback seems likely before Bitcoin can aim for higher levels. First, a clean retest of the $90,000 mark is vital to stabilize the price and eliminate overinvolved long positions, after which the path to near-term resistance at $95,000 may open up, laying the groundwork for a potential ascent toward six-figure levels.

Final Thoughts

In summary, while Bitcoin appears to be in a constructive phase around the $90k mark, the recent liquidity dynamics and lack of strong institutional support point to an imminent need for caution. Traders may want to observe market trends closely as Bitcoin navigates this volatile landscape.