Bitcoin slumped again by more than 2%, breaking below $109K after three days of moderate recovery.
Bitcoin remains trapped within a bearish structure, forming successive lower highs and lower lows that keep momentum tilted to the downside.
For any meaningful reversal to take hold, the asset needs to reclaim and hold solidly above the $111K threshold, which is a level that would help rebuild the confidence required for trend stabilization. Until then, market rallies are likely to be viewed as temporary corrective moves within a broader downtrend.
The broader crypto market continues to experience a deep phase of deleveraging, with traders stepping back as volatility rises and confidence fades in sustaining higher levels.
According to data from CoinGlass, long liquidations have surged sharply, totalling more than $350 million from yesterday to the time of writing, compared with around $260 million in short liquidations during the same period. Such imbalance underscores how fragile the bullish side of the market has become, with leveraged positions being flushed out rapidly. In this environment, bulls appear hesitant to re-enter aggressively, recognizing that a sustainable recovery now requires firmer fundamental support rather than speculative flows.
However, some underlying market dynamics suggest that reaccumulation may be taking place beneath the surface. On-balance volume (OBV) has been inching upward, hinting that buying pressure is gradually outweighing selling activity despite the price weakness. This divergence could indicate that stronger hands are accumulating, reinforcing the hypothesis that the current phase might be one of quiet rebuilding rather than outright distribution.
Should this pattern persist, it may later serve as a foundation for a more resilient bull recovery once macro and liquidity conditions improve.
Despite the prevailing weakness, some macro developments may offer limited upside potential. The U.S. dollar has strengthened to its highest level in nearly a week against a basket of major currencies, supported by easing concerns over U.S.-China tensions and growing optimism surrounding a resolution to the ongoing government shutdown. White House economic adviser Kevin Hassett told CNBC that the 20-day shutdown is “likely to end sometime this week,” a statement that has slightly improved overall market sentiment.
Meanwhile, U.S. President Donald Trump has struck a more optimistic tone regarding trade relations with Beijing, expressing confidence in reaching what he called a “very fair deal” with President Xi Jinping and hinting at an early visit to China in 2026. Any progress on this front could ease broader market anxiety. Remember that escalating trade tension cause the recent market flush when over $16B of long positions got wiped out in few.
Also, institutional activity, remains resilient. According to data from SoSo Value, Bitcoin spot ETF flows turned negative last week, recording net outflows of $1.23 billion, while Monday alone saw an additional $40 million in outflows. The two preceding weeks, however, witnessed nearly $6 billion in cumulative inflows, suggesting that despite recent withdrawals, institutional participation is not collapsing but rather normalizing after an aggressive accumulation phase.
Overall, Bitcoin still shows early signs of reaccumulation, as reflected by the rising on-balance volume, yet it remains confined within a bearish market structure. A faster recovery appears increasingly dependent on stronger fundamentals, such as the government’s reopening or clearer signs of easing trade tensions, Otherwise, the market is likely to remain vulnerable to further downside pressure amid the prevailing weak sentiment.
