Bitcoin Retracts to $91K – Spot Buyers Steadily Regain Control

Bitcoin (BTC) has retreated to around the $91,000 mark after failing to maintain its position above $95,000 from the previous week. Despite this pullback, the overall market sentiment remains strong, supported by active spot buying and institutional participation. The continued demand suggests potential for recovery, especially as significant macro and cryptocurrency developments unfold.

Key Takeaways

Bitcoin has dropped to $91,000 after struggling to stay above $95,000.
Spot market demand is showing signs of strength, with buyers taking the lead.
U.S. institutional investors continue to accumulate Bitcoin, purchasing an average of $4.4 billion monthly.
Global liquidity conditions are favorable for Bitcoin, though macroeconomic risks, such as U.S.-EU trade tensions, could influence prices.

Bitcoin pulls back to $91K - Spot buyers quietly take control

Spot Demand Takes Charge

The recent sentiment in the spot market has become positive, marking the first encouraging sign in several weeks. The Bitcoin Spot Taker CVD (Cumulative Volume Difference) has moved notably into positive territory. This metric assesses whether market activity over a specified timeframe—typically 90 days—is driven more by buyers or sellers. A positive result indicates that buyers are making their presence felt once more.

Spot Bitcoin CVD

Source: CryptoQuant

This shift represents a transfer of control from sellers to buyers, which often leads to more sustainable price movements. It’s important to note that this demand driven by spot purchasing indicates organic accumulation instead of leveraged trading, bolstering the case for medium-term growth.

Data from exchanges strengthens this narrative, revealing that around $171.83 million worth of Bitcoin has been removed from exchanges—an indication of persistent buying pressure. This is a significant turnaround from the $203 million in net selling observed in the week ending January 12. If this accumulation trend continues, decreasing exchange reserves may tighten supply and support a price recovery.

Institutions Remain Unshaken

Institutional investors seem undeterred by recent market fluctuations. Data from CryptoQuant focusing on U.S. wallets holding between 100 and 1,000 BTC indicates a steady accumulation trend over the past year. Institutions have acquired roughly $53 billion worth of Bitcoin, which is about 577,000 BTC, averaging $4.4 billion each month.

Bitcoin institutional inflow

Source: CryptoQuant

These purchases are significantly influenced by U.S. spot Bitcoin ETFs, backed by major asset managers like BlackRock and Fidelity. According to AMBCrypto’s analysis of ETF flows, $1.21 billion worth of Bitcoin has already been acquired in January. Historically, there remains a potential for inflows of up to $3.19 billion before the month concludes. However, these figures are contingent on broader market sentiment and macroeconomic indicators.

Global Liquidity Continues to Favor Price Growth

The long-term relationship between Bitcoin and global liquidity still indicates support for higher prices. Bitcoin typically peaks when the growth of the global M2 money supply exceeds 14.4 percent. Currently, the rate sits close to 11 percent, indicating that liquidity conditions are favorable and have not yet reached the extremes often associated with market peaks.

Global money supply

Source: Alphractal

Nonetheless, macroeconomic risks are under scrutiny. Farzam Ehsani, CEO of the cryptocurrency exchange VALR, has expressed concerns that heightened U.S.-EU tariff tensions could impact risk assets, including Bitcoin. In a statement to AMBCrypto, Ehsani remarked, "President Trump’s aggressive trade rhetoric is pushing markets back into a full de-risking phase."

He elaborated that the tariff disputes have primarily affected cryptocurrencies because they are viewed as risk assets, rather than stemming from any inherent weakness in the market. “While U.S.-EU trade concerns have impacted sentiment, other risk assets such as the KOSPI remain stable or are even increasing. This indicates a cautious stance toward cryptocurrency, with capital diverting towards alternative risk markets,” he noted.

At present, while institutional buying and spot demand are providing optimistic signals, developments in tariff negotiations will be crucial in determining the near-term market trajectory.

Final Thoughts

As Bitcoin's market dynamics continue to unfold, the interplay between spot demand, institutional accumulation, and macroeconomic factors will be key in shaping the cryptocurrency's future movements.