The price of Bitcoin has recently declined to new six-month lows, dropping significantly below the psychologically significant $100,000 level and exacerbating a sell-off that has resulted in nearly a 25% loss of value in just over a month.

At the time of this report, the price of Bitcoin stood at $94,850, having experienced a brief rebound from lows of $94,000.

This decline is occurring in conjunction with a turbulent week across global markets, where risk assets—including major technology firms and cryptocurrencies—have suffered due to diminishing expectations for a Federal Reserve rate cut in December.

Only two weeks prior, market participants were pricing in a near-certain 97% chance of easing; however, this probability has since dropped to approximately 50%, resulting in a widespread deleveraging across both equities and digital assets.

Factors Contributing to the Decline in Bitcoin Price

While macroeconomic pressures play a significant role, internal market dynamics are contributing to the downturn. Recent data from CryptoQuant indicates that long-term holders have sold roughly 815,000 BTC in the past month, representing the most substantial outflow since early 2024.

Current spot demand has weakened at a particularly inopportune time, with U.S.-listed spot Bitcoin ETFs experiencing hundreds of millions in daily outflows, further draining liquidity and exacerbating downward momentum.

The impact of this volatility is not confined to the cryptocurrency market; risk-sensitive equities, including Nvidia, Tesla, Palantir, Coinbase, and Bitcoin miners, have all suffered amid a flight from speculative assets.

Lingering concerns regarding a potential AI bubble, compounded by uncertainties surrounding the release of delayed U.S. economic data following a prolonged 43-day government shutdown, have caused the VIX index to reach its highest level since mid-October.

Institutional purchasing activity has also fallen short of daily supply from miners, contributing to consistent sell pressure during a period characterized by declining liquidity.

Bitcoin Price at Critical Levels

Despite the price slipping below $100,000, estimates suggest that about 72% of all circulating Bitcoin remains profitable, indicating that long-term holders are still enjoying gains, although overall sentiment remains lackluster.

Other analysts are observing indications that the market may be nearing a bottom. JPMorgan has estimated that Bitcoin’s current production cost, influenced by increasing network difficulty, stands at around $94,000—a level which has historically served as a supportive floor.

As Bitcoin approaches this critical threshold, the bank maintains a bullish outlook for the next 6–12 months, targeting a price of approximately $170,000.

Nevertheless, the dynamics influencing this correction extend beyond individual retail traders. Institutional players, large holders, and leveraged market structures predominantly dictate major market movements. Single transactions from wallets containing significant amounts of BTC can markedly influence market sentiment across exchanges.

However, the recent wave of selling among large holders is not indicative of panic, but rather reflects typical behaviors observed late in a market cycle, according to insights from Glassnode.

According to Glassnode, long-term holders are gradually realizing profits, with monthly spending escalating from 12,000 BTC per day in July to approximately 26,000 BTC—a pattern consistent with normal distributions observed during bull markets, as opposed to an “OG whale exodus.”

The broader economic context remains unfavorable. The U.S. government has resumed operations following a historic 43-day shutdown, which marked the longest in American history, coinciding with President Trump’s late-Wednesday approval of a temporary funding bill. This measure only funds federal agencies through January 30, perpetuating uncertainty in the markets even as normal operations are gradually reinstated.

As of the time of this report, Bitcoin is trading at $95,670, remaining near production-cost levels and testing crucial technical support.

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