Following a significant decline last week, closing just under a pivotal support level of approximately $95,000, Bitcoin (BTC) is currently navigating through uncertain territory. This precarious situation raises concerns over potential sell-offs in the immediate future. As the third week of 2025 commenced, the flagship cryptocurrency opened with a bearish sentiment, having dropped more than 5% last week, which positions its trading price around $94,146 during the early European trading hours on Monday. The market remains anxious as investors monitor trends closely.

Heightened Concerns Over Bitcoin and Cryptocurrency Selloff

The cryptocurrency community is increasingly apprehensive in light of the re-election of former US President Donald Trump. This event has contributed to a looming sell-the-news sentiment as the inauguration approaches. Additionally, Bitcoin’s fear and greed index reflects a growing sense of greed among certain traders, while activity from large investors, often referred to as ‘whales’, appears to be tapering off. These mixed signals contribute to a tense atmosphere in the market.

Recent market analysis from Santiment highlights that trading volumes in the crypto space have plummeted to figures reminiscent of levels seen prior to the US elections on November 5, 2024. This decline in trading volume usually signifies a lack of confidence among investors, which could result in increased volatility.

Moreover, data reveals that the overall supply of Bitcoin on centralized exchanges (CEXes) has increased by 2,729 BTC over the past 24 hours, valued at around $256 million. This uptick results in a total of roughly 2.19 million BTC available on trading platforms, indicating a shift in trader behavior to offload assets amid the prevailing uncertainty. Traders remain observant of these evolving metrics as they adapt to the fluctuating market conditions.

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Technical Analysis and Midterm Targets

Analyzing Bitcoin’s price movement against the US dollar, there seems to be a potential head and shoulders (H&S) pattern forming on the daily chart. The daily Relative Strength Index (RSI) suggests the presence of a bearish divergence, indicating that Bitcoin’s price might be at risk of a downward correction, possibly dipping below the critical $90,000 threshold in the near future.

Renowned trader Peter Brandt has pointed out that Bitcoin’s price action may be playing out a classic head and shoulders pattern, which could either lead to a downward trend or potentially morph into a larger complex price structure. Furthermore, Brandt warns traders that should the BTC price continually close below $108,000, it signals the establishment of a new bearish trend, aligning with the broader market sentiment. Hence, traders are advised to remain vigilant and adapt their strategies promptly.

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