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Bitcoin Correction Alert: ETF Flows Turn Negative and Liquidity Weakens
Bitcoin fell to $94,000 on Friday, intensifying fears of further liquidation as the market’s largest cryptocurrency inches closer to a potential yearly low near $76,000. The drop comes at a fragile moment for the broader crypto landscape, with BTC slipping below its 365-day moving average, a historically important support level that has defined the backbone of the current bull cycle.
This breakdown has put traders and analysts on high alert. Key on-chain cost-basis metrics are beginning to show early cracks, suggesting that the market may be entering a more volatile corrective phase.
Will Bitcoin Break Below $90,000?
The focal point of current market discussions is Bitcoin’s relationship with its 365-day moving average, now hovering near $102,000. Since late 2023, this long-term trendline has served as Bitcoin’s primary structural floor, repeatedly supporting price throughout the ongoing bull cycle.
But this week’s failure to reclaim that level has raised unsettling historical parallels. The pattern resembles what unfolded in December 2021, when multiple rejections at the same moving average signaled the onset of the 2022 bear market. While current conditions are not identical, the echo is loud enough to trigger caution.
Still, the broader macro environment hints at a mid-cycle reset rather than a definitive bull-market peak. Liquidity conditions remain shaky, ETF flows have turned negative, and long-term holders are distributing coins at their fastest pace since early 2024. Even with these signs, the market does not yet reflect the full structural deterioration seen in previous macro tops.
What remains undeniable, however, is the importance of this technical breakdown. Historically, staying below the 365-day average for several consecutive weekly closes has led to deeper retracements, pushing Bitcoin into extended correction zones. If the pattern holds, the probability of a drop below $90,000 materially increases.
On-Chain Stress Builds as Cost-Basis Bands Break
Beyond technical levels, on-chain data is beginning to confirm growing pressure on a key cohort of BTC holders. The realized price for investors who accumulated Bitcoin between 6 and 12 months ago now sits near $94,600.
This group represents a significant portion of the demand created during the major ETF-driven rally, making their cost basis a critical psychological and structural zone. Historically, when price falls below this band, it often marks the first phase of capitulation pressure within a bull cycle.
On Friday, Bitcoin briefly dipped under this threshold, pushing many of these mid-term holders into unrealized losses. While a single break does not confirm a broader trend, the reaction closely mirrors patterns observed in previous cycles.
Echoes of Past Market Cycles Emerge
Bitcoin’s recent move below the 6–12 month cost-basis level revives memories of earlier market transitions. Similar breaks occurred during:
- 2017–2018, preceding a long, grinding decline
- 2021–2022, marking the shift from bullish momentum to a prolonged bear market
In both historical periods, slipping below this specific cost-basis band was followed by extended drawdowns as selling pressure gradually intensified.
While the current macro environment remains different in several respects, the structural similarities are impossible to ignore. Each previous cycle saw sustained weakness once this band was breached, making the current breakdown a potentially meaningful signal for traders tracking long-term market health.
A Market Balancing Between Reset and Breakdown
Bitcoin now finds itself at a crossroads. The combination of declining price momentum, loss of the 365-day moving average, negative ETF flows, and rising stress among mid-term holders has created a narrative that leans toward caution. Yet at the same time, the broader market context suggests that this may represent a mid-cycle recalibration rather than a full-scale breakdown.
If Bitcoin can quickly reclaim major support levels, the current dip may be remembered as just another shakeout in a volatile but ongoing bull run. But if the breakdown persists, history suggests the path toward sub-$90,000 becomes increasingly likely.
For now, the market watches closely as Bitcoin tests whether this decline is a temporary setback—or the beginning of a deeper structural correction.
