20-2-2025 – Bitcoin’s swift recovery following Tuesday’s dip to $93,000 may be short-lived, with leading cryptocurrency analysts at CryptoQuant forecasting a possible further decline to $86,000 amidst growing market concerns.
The flagship cryptocurrency, which experienced unprecedented growth in late 2024 following Trump’s electoral victory and subsequent regulatory optimism, is now showing signs of strain. Market data reveals a significant decline in demand, with recent figures indicating a sharp drop to 70,000 BTC from December’s peak of 279,000 BTC.
Particularly worrying for market observers is the reversal in spot Bitcoin ETF flows. Following daily inflows of up to 18,000 BTC during November and December, these investment vehicles have recorded consistent outflows over the past fortnight.
The CryptoQuant Inter-exchange Flow Pulse, a crucial metric tracking Bitcoin movements between exchanges, highlights deteriorating US market sentiment. Transfers to major exchange Coinbase have dipped below the 90-day moving average, suggesting waning institutional interest.
Stablecoin dynamics, traditionally a reliable indicator of market health, paint an equally concerning picture. Despite the total stablecoin market capitalisation recently surpassing $200 billion, growth momentum has significantly slowed. USDT, the market’s dominant stablecoin, has witnessed a dramatic 90% decline in its 60-day average market cap growth since mid-December, falling from $20 billion to a mere $1.5 billion.
Network activity on the Bitcoin blockchain has plummeted to twelve-month lows, according to CryptoQuant’s Network Activity Index. The metric has declined 17% from its November 2024 peak, dropping below its annual moving average for the first time since China’s mining ban in July 2021.
Bitcoin’s struggles follow January’s historic high of $109,000, achieved amid enthusiasm surrounding Donald Trump’s presidential victory. Recent controversial meme coin launches, including TRUMP and LIBRA tokens, have further dampened market sentiment.
Noted cryptocurrency trader Bob Loukas suggests the market may be approaching a sentiment bottom. However, he warns that Bitcoin could breach the $90,000 support level before finding stable ground.
“The real question isn’t about the timing of the bottom, but whether the $90,000 support will hold,” Loukas posted on X, formerly Twitter. “Regardless, we’re witnessing a necessary reset in market sentiment.”