Bitcoin is trading near $87,600, extending a short-term pullback after failing to hold above the $88,000 level. The latest move comes amid a wave of forced liquidations in derivatives markets and renewed macro uncertainty tied to U.S. fiscal risks and trade tensions.
As breaking crypto news continues to focus on liquidation-driven volatility and shifting macro signals, the market is showing signs of transition rather than panic. After pushing toward six-figure territory earlier this year, Bitcoin has entered a consolidation phase marked by rising volatility and changing behavior among both short-term traders and long-term holders.
Bitcoin drops below $88,000 as liquidations accelerate
Bitcoin slipped below $88,000 on Jan. 25, triggering a rapid selloff that pushed prices into the high $87,000 range. According to market commentary shared by The Kobeissi Letter, roughly $60 million in leveraged long positions were liquidated within 30 minutes as the price broke through key intraday support.
https://x.com/KobeissiLetter/status/2015457604026122247
The liquidation cascade followed a sharp rejection from higher levels and reflected crowded positioning on the long side after Bitcoin’s strong rally into early January. Once stop levels were hit, forced selling accelerated the decline rather than organic spot selling.
Macro headlines added to the pressure. Rising expectations of a potential U.S. government shutdown and fresh tariff threats from President Donald Trump weighed on broader risk sentiment. Trump signaled the possibility of imposing a 100% tariff on Canadian imports, escalating trade tensions at a time when markets are already sensitive to policy uncertainty.
Bear flag structure emerges after the pullback
From a technical perspective, Bitcoin’s price action has formed a bear flag pattern on the daily timeframe, according to a TradingView chart shared by analyst CryptoGerla. The structure developed after a sharp breakdown from prior support in the low to mid $100,000 range.
https://x.com/CryptoGerla/status/2015351042834141428
Following the drop, Bitcoin’s price consolidated inside a narrow, upward-sloping channel, a pattern often associated with corrective pauses rather than trend reversals. Former support has now turned into resistance, with rebounds repeatedly stalling below that zone.
As long as Bitcoin remains below reclaimed resistance, downside risk persists. A breakdown below the lower boundary of the flag would open the door to deeper support levels, with some analysts highlighting the mid $70,000 area as a potential downside zone if selling pressure resumes.
At the same time, holding above the current range could allow price to stabilize and rebuild structure, especially if liquidation pressure continues to fade.
Bitcoin’s price dropped by 6% during the past week. Source: Coincodex
Long-term holders begin selling at record levels
Beyond short-term price action, on-chain data points to a notable shift in long-term holder behavior. According to CryptoQuant, Bitcoin held dormant for more than two years is moving at the highest rate in history, marking a rare change in market dynamics during a bull cycle.
Long-term holders typically act as stabilizing forces, absorbing volatility rather than amplifying it. When they begin selling in size, it often reflects profit-taking near perceived cycle highs or renewed confidence that the market can absorb additional supply.
https://x.com/coinbureau/status/2014442950810599581
The surge in long-term holder selling during 2024 and 2025 suggests that older coins are being redistributed into the market, increasing liquidity but also contributing to short-term volatility. While this behavior does not automatically signal a market top, it often coincides with periods of consolidation as supply shifts from strong hands to more active participants.
Market outlook hinges on absorption of supply
Bitcoin’s next move will likely depend on how effectively the market absorbs both derivative-driven selling and long-term holder distribution. If spot demand remains resilient and price stabilizes above the current range, the recent pullback could resolve into a broader consolidation rather than a deeper correction.
However, failure to hold near $87,000 would increase the probability of a move toward lower support zones, especially if macro uncertainty intensifies or risk appetite weakens further.
For now, Bitcoin remains in a transitional phase, balancing elevated long-term optimism against short-term structural pressure. How price reacts around current levels may define the next major leg of the cycle.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
