TLDR
Bitcoin experienced a sharp decline to $93,000, with Cryptoquant warning of potential further drops to $86,000 due to weakening demand and liquidity conditions
Bitcoin ETF inflows have reversed dramatically, falling from +18,000 BTC daily in November 2024 to -1,000 BTC, indicating decreased institutional interest
Network activity has hit yearly lows, with the Bitcoin Network Activity Index dropping 17% from its November peak to 3,658
Stablecoin market growth has slowed substantially, with the 60-day growth rate falling 92% from $20.4 billion to $1.5 billion
Despite bearish indicators, Bitcoin’s realized price metrics suggest the market is not overextended, and long-term holders may benefit from maintaining positions
Bitcoin’s price trajectory has taken a notable turn, reaching a one-month low of $93,000 on February 19, 2025. This movement marks a departure from the asset’s strong performance following the U.S. elections in late 2024, with multiple factors contributing to the current market dynamics.
Recent data from Cryptoquant highlights a substantial decline in apparent demand, which has fallen 75% from 279,000 BTC in early December 2024 to 70,000 BTC by mid-February 2025. This dramatic reduction in demand presents a stark contrast to the optimistic market sentiment that characterized the post-election period.
The introduction of spot Bitcoin ETFs, initially heralded as a watershed moment for institutional adoption, has shown signs of cooling. Daily U.S. ETF purchases have reversed course, dropping from positive inflows of 18,000 BTC in early November 2024 to negative flows of 1,000 BTC in recent data.
Grayscale’s GBTC has emerged as a notable outlier in the ETF landscape. Excluding GBTC, ETF holdings have remained stagnant since late 2024, indicating a broader pause in institutional participation. This development has raised questions about the sustainability of Bitcoin’s recent price levels.
Network activity, a fundamental indicator of blockchain usage and adoption, has deteriorated to yearly lows. Cryptoquant’s Bitcoin Network Activity Index has experienced a 17% decline from its November 2024 peak, falling to 3,658 and dipping below its 365-day moving average for the first time since July 2021.
The stablecoin market, often viewed as a barometer for crypto market liquidity, has shown signs of deceleration. While the total stablecoin market capitalization has exceeded $200 billion, the 60-day growth rate has decreased by 92%, falling from $20.4 billion in December 2024 to $1.5 billion.
Market Analysis
Market analysts have identified several potential catalysts for the current price pressure, including inflation concerns and possible selling pressure related to FTX creditor repayments. The prospect of new import tariffs has added another layer of uncertainty to market sentiment.
U.S. spot demand has shown notable weakness, according to Cryptoquant’s Inter-exchange Flow Pulse. Bitcoin transfers to Coinbase, traditionally associated with bullish U.S. trading activity, have slowed considerably and fallen below their 90-day moving average – a pattern that has historically preceded price corrections.
Technical analysis suggests that Bitcoin’s realized price band of $86,000 represents a critical support level. Without improvements in demand or liquidity conditions, analysts warn that BTC prices may test this threshold in the coming weeks.
Despite these challenging market conditions, long-term metrics offer a more nuanced perspective. The Bitcoin Realized Pricing Bands indicator suggests that the market is not overextended on higher timeframes, potentially providing some comfort to long-term holders.
The advanced Bitcoin sentiment index currently reads at 31%, compared to the more typical reading of 43% observed over the past month. This metric, which incorporates factors such as Open Interest, Net Taker Volume, and Volume Delta, indicates a decidedly bearish short-term sentiment.
Current price action shows Bitcoin trading above the $96,000 mark, representing a recovery from recent lows. The range-bound movement of the past two weeks suggests that the $99,000 level remains a key short-term price target.
For investors focused on longer time horizons, historical patterns suggest that price moves beyond 3.2 times the realized price have traditionally presented profit-taking opportunities. However, the current price sits closer to 2.4 times the realized price, indicating potential room for upward movement.
The most recent data shows Bitcoin maintaining support above the $90,000 level, despite ongoing pressures from ETF outflows and broader market concerns. Trading volume has remained steady, with 24-hour volume figures holding above $45 billion.
