Bitcoin Price Forecast: Why is BTC Falling?

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The cryptocurrency market is experiencing another bout of volatility, with Bitcoin (BTC) trading around $95,700**—a noticeable drop from recent highs above $100,000. On Wednesday, BTC continues to edge downward, struggling to reclaim the $96,000 level after a sharp 5% decline the previous day. This correction has sparked widespread concern among traders and investors, triggering over **$694 million in liquidations across the crypto market in just 24 hours.

With key on-chain and market sentiment indicators flashing warning signs, many are asking: Why is Bitcoin falling? And more importantly—what’s next for BTC?

Signs of Growing Selling Pressure

One of the most telling indicators of current market dynamics is CryptoQuant’s BTC Net Taker Volume on Binance, which has turned sharply negative. This metric measures whether buyers ("takers" buying at the ask) or sellers ("takers" selling at the bid) are dominating trading activity. A negative value indicates stronger selling pressure.

On Tuesday, during the release of key U.S. economic data—including the Institute for Supply Management (ISM) Manufacturing PMI and JOLTs Job Openings report—the Net Taker Volume plunged to –$325 million, the lowest level recorded so far in 2025. These economic reports revealed weaker-than-expected conditions for risk assets, contributing to a broader sell-off in equities and digital assets alike.

👉 Discover how real-time market data can help predict price reversals before they happen.

This surge in selling coincided with growing fear in the derivatives market. According to CoinGlass, total liquidations across the crypto market reached $694.11 million** in the past 24 hours, with nearly **$125 million attributed to Bitcoin alone. Such large-scale liquidations often amplify downward momentum, as automated margin calls force leveraged positions to close at unfavorable prices.

Bearish Sentiment Builds: Long-to-Short Ratio Hits One-Month Low

Another red flag comes from the Bitcoin long-to-short ratio, currently sitting at 0.89—the lowest level in over a month. When this ratio falls below 1.0, it means more traders are opening short positions (betting on price declines) than longs (bets on price increases), signaling bearish dominance.

A shrinking long-to-short ratio suggests that speculative traders are turning cautious or actively positioning for further downside. While not a definitive predictor, this shift in trader positioning often aligns with extended correction phases, especially following strong rallies.

Institutional Demand Shows Signs of Cooling

Beyond retail and derivatives markets, institutional interest also appears to be softening. Data from Coinglass shows that U.S.-listed Bitcoin spot ETFs recorded only $52.40 million in net inflows** on Tuesday—down dramatically from **$978.60 million the previous day.

This sudden drop raises questions about sustained institutional appetite at current price levels. If inflows continue to dwindle—or worse, if outflows begin—the lack of institutional buying support could accelerate further downside pressure on BTC.

Historically, strong ETF inflows have acted as a bullish catalyst, absorbing sell-side pressure and reinforcing upward trends. Conversely, weak or negative flows may indicate profit-taking or risk-off behavior among large players.

Technical Outlook: Can Bitcoin Hold Key Support?

From a technical perspective, Bitcoin’s recent close below $100,000 marks a significant shift in market structure. That level had served as both psychological and technical support during prior weeks. Its breach increases the likelihood of deeper retracement.

At the time of writing, BTC hovers near $95,800**, with immediate support seen around the **38.2% Fibonacci retracement level at $92,493. This Fibonacci level is derived from the move between the November 4 low ($66,835) and the December 17 high ($108,353). A drop to this zone would represent a correction of roughly 38% from the prior rally.

Additionally, the Relative Strength Index (RSI) on the daily chart reads 47, below the neutral 50 threshold and trending downward—confirming bearish momentum. Until the RSI rebounds above 50 and sustains it, upside potential remains limited.

However, should Bitcoin regain strength and close decisively above $100,000 again, the path could reopen toward retesting its all-time high of **$108,353**, set on December 17, 2024.

Frequently Asked Questions (FAQs)

Q: What causes Bitcoin’s price to drop suddenly?
A: Sudden drops are often triggered by macroeconomic news, leveraged position liquidations, negative on-chain signals (like increased exchange inflows), or shifts in institutional sentiment—such as reduced ETF inflows.

Q: How do liquidations affect Bitcoin’s price?
A: When traders use leverage and prices move against them, exchanges automatically liquidate their positions. These forced sales add downward pressure, often creating cascading effects that deepen price declines.

Q: Is a drop below $92,000 likely?
A: While not guaranteed, it's possible if selling pressure persists and institutional demand remains weak. The $92,493 Fibonacci level is a key watchpoint—if broken, extended downside toward $88,000 could follow.

Q: What does a low long-to-short ratio mean for BTC?
A: A ratio below 1.0 indicates more traders are betting on price declines than gains. While useful contextually, it should be analyzed alongside volume and funding rates to avoid misleading conclusions.

Q: Can Bitcoin recover if ETF inflows pick up again?
A: Yes. Strong and consistent ETF inflows signal sustained institutional demand, which can absorb selling pressure and reignite bullish momentum.

👉 Learn how top traders analyze ETF flows and on-chain data to time their entries.

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Final Thoughts: Caution Ahead, But Opportunity Looms

While Bitcoin shows clear signs of weakness—ranging from technical breakdowns to cooling institutional demand—the long-term fundamentals remain intact. Corrections like this are common after rapid rallies and often create strategic entry points for patient investors.

Market sentiment may be cautious now, but volatility also brings opportunity. Traders who monitor on-chain metrics, ETF flows, and macroeconomic triggers will be best positioned to navigate this phase—and potentially profit from the next leg up.

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