Bitcoin’s impressive rally to $109,000 in early 2025 is showing signs of weakness, with analysts cautioning that the price could dip to $86,000 in the near future. According to CryptoQuant, multiple bearish factors—including declining demand, ETF outflows, slowing stablecoin growth, and reduced blockchain activity—are putting pressure on BTC’s price.
While Bitcoin remains above the $90,000 level for now, its inability to break higher suggests that momentum is fading. If current trends continue, the market may enter a deeper correction before finding a solid support level. Traders and investors are now watching closely to see whether Bitcoin can hold above key levels or if further downside is inevitable.
Bitcoin Struggles to Maintain Momentum
Bitcoin has been trading between $90,000 and $93,000 in recent weeks, struggling to regain its previous highs. This stagnation is a stark contrast to the strong upward movement seen in late 2024, when BTC surged past $100,000 on the back of institutional inflows and renewed retail interest.
Now, however, the situation appears to be shifting. CryptoQuant’s latest analysis suggests that Bitcoin could fall further due to weakening market conditions. The key question is whether BTC can hold its ground above $90,000, or if sellers will push the price down to the next major support at $86,000. A break below this level could trigger a larger sell-off, as traders may look to exit their positions before further losses occur.
Bitcoin’s long-term bullish outlook remains intact, but short-term market dynamics indicate that a period of consolidation—or even a larger correction—may be underway. If buyers do not step in soon, BTC’s recent gains could be at risk.
Declining Demand Signals Caution
One of the biggest concerns for Bitcoin bulls is the declining demand for BTC.
In December 2024, Bitcoin saw a massive increase in demand, with CryptoQuant data showing that demand peaked at 279,000 BTC. This surge was largely driven by optimism around Donald Trump’s presidential victory, which many believed would lead to a more favorable regulatory environment for cryptocurrencies.
However, demand has dropped significantly in the past two months, now sitting at just 70,000 BTC. This represents a 75% decline, indicating that the initial wave of enthusiasm may have worn off.
If demand continues to decrease, Bitcoin could struggle to maintain current price levels. A further drop in demand could signal that investors are moving away from BTC in search of other opportunities, potentially leading to a deeper price correction.
ETF Outflows Replace Previous Buying Pressure
Another major factor affecting Bitcoin’s price is the decline in ETF inflows.
In late 2024, Bitcoin ETFs were a key driver of BTC’s price increase, as institutional investors rushed to gain exposure to the asset. At the peak, BTC ETFs were seeing inflows of up to 18,000 BTC per day.
However, the trend has now reversed. Over the past two weeks, Bitcoin ETFs have recorded consistent net outflows, meaning more BTC is being sold than purchased. This is a troubling sign because ETF flows are often considered a leading indicator of market sentiment.
When institutional investors were accumulating BTC through ETFs, prices climbed rapidly. Now that outflows are becoming the norm, there is a risk that Bitcoin could lose its institutional support, further weakening its price stability.
Stablecoin Liquidity is Slowing
Stablecoins play a crucial role in the crypto market because they act as on-chain liquidity, allowing traders to quickly buy BTC and other assets. In previous bull runs, rising stablecoin supply has been a key signal of growing market participation.
However, recent data suggests that stablecoin expansion is losing momentum:
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The total stablecoin market cap recently crossed $200 billion, but its growth rate has slowed.
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USDT’s 60-day average market cap growth has fallen over 90%—from $20 billion in mid-December to just $1.5 billion today.
This decline suggests that fresh capital is not entering the market at the same pace as before, raising concerns about Bitcoin’s ability to sustain its rally. Without stablecoins fueling new purchases, BTC may struggle to find the liquidity needed to push higher.
Bitcoin’s Blockchain Activity Drops to a One-Year Low
On-chain activity is another important metric for gauging Bitcoin’s market strength, and recent data shows a significant decline.
CryptoQuant’s Bitcoin Network Activity Index has fallen 17% from its peak in November 2024, reaching its lowest level in a year. Even more concerning is the fact that the index has dropped below its 365-day moving average—a level it hasn’t breached since July 2021, when China banned BTC mining.
This decline in network activity suggests that:
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Fewer transactions are taking place, meaning lower trading volumes.
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Investor engagement is declining, which could reduce speculative demand.
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The market is cooling off, potentially leading to a prolonged consolidation period.
Historically, sharp declines in blockchain activity have preceded market corrections, meaning that Bitcoin could see further downside unless activity picks up soon.
Conclusion
Bitcoin’s strong performance in early 2025 appears to be losing momentum, with multiple warning signs pointing to a potential correction. CryptoQuant’s analysis suggests that BTC could fall to $86,000 due to:
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Declining investor demand
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ETF outflows
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Slowing stablecoin liquidity
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Falling blockchain activity
Despite these bearish signals, some analysts believe that Bitcoin is simply undergoing a normal market reset before its next major move. However, if demand does not return soon, a deeper pullback could be in store.
FAQs
Why is Bitcoin at risk of falling to $86,000?
Bitcoin is facing downward pressure due to declining demand, ETF outflows, slowing stablecoin liquidity, and reduced blockchain activity. These factors suggest that investor enthusiasm is fading, making BTC vulnerable to further declines.
How do ETF outflows affect Bitcoin’s price?
Bitcoin ETFs played a major role in the 2024 bull run, attracting institutional investors. However, recent net outflows indicate that institutions are now selling rather than accumulating BTC, which could weaken price support and drive further corrections.
What does stablecoin liquidity have to do with Bitcoin’s price?
Stablecoins, such as USDT, are often used to buy Bitcoin on exchanges. A slowdown in stablecoin supply growth—like the recent 90% drop in USDT’s market cap expansion—suggests that new capital is not entering the market, reducing Bitcoin’s buying power.
Why is Bitcoin’s network activity declining?
CryptoQuant’s Bitcoin Network Activity Index shows that on-chain transactions have fallen to their lowest level in a year. This decline suggests reduced investor engagement and weaker speculative interest, both of which could contribute to further price drops.