Bitcoin experienced a significant drop to $94,000 on Friday, raising alarm bells among investors as the cryptocurrency approaches a yearly low of $76,000. This recent decline has put Bitcoin’s value under considerable downside pressure, particularly following its fall below the crucial 365-day moving average—a benchmark that has been a reliable support level throughout the current bull cycle.
The breakdown under this moving average, which is currently situated around $102,000, has ignited fears of a larger market correction. Analysts are drawing parallels to past market behaviors, especially with the sudden uptick in selling pressure seen from long-term holders, who appear to be distributing their assets at the fastest rate since early 2024. The current market resembles December 2021, when repeated rejections at the 365-day moving average marked the onset of the 2022 bear market.
While some market analysts contend that the overall context suggests this could be a mid-cycle reset rather than a complete macro top, liquidity conditions are showing instability. ETF flows have turned negative, further exacerbating concerns about Bitcoin’s diminishing strength. Historical data supports a continuation of this trend; remaining below the 365-day moving average for several weeks has often indicated a more significant retracement in the past.
Given the recent price movement, on-chain data becomes critical. The realized price for Bitcoin holders who purchased their assets between six and twelve months ago hovers near $94,600. These holders, who heavily accumulated during a rally driven by ETF enthusiasm, often find their cost basis acting as a pivotal point. With Bitcoin recently trading below this threshold, many are now facing unrealized losses.
Market analysts note that breaking below this cost basis could lead to increased selling pressure, mirroring previous trends from the 2017-2018 and 2021-2022 periods, where price declines followed after slipping beneath this critical level. Long-range cycle analysis indicates that Bitcoin commonly experiences corrections ranging from 25% to 40% in the middles of its bull cycles. If one applies this typical trend to the current peak of nearly $125,000, a pullback could see Bitcoin’s value drop to between $75,000 and $93,000—aligning with both technical and on-chain support levels.
For traders watching the unfolding situation, three major price support zones are currently in focus. The first immediate support range is between $92,000 and $95,000, which coincides with the six to twelve-month cost basis as well as recent ETF inflow levels. Should further declines occur, the next critical support band is seen between $85,000 and $90,000, reflective of a typical mid-cycle correction.
In scenarios where ETF outflows accelerate amid adverse macroeconomic conditions, the cryptocurrency could potentially test the $75,000 to $82,000 range, representing a 35% to 40% drop from the recent cycle high. However, drops below the $70,000 mark appear improbable without a severe liquidity shock occurring in the market.
Despite the recent downward trends, Bitcoin has yet to display signs of reaching a blow-off top or structural exhaustion, suggesting that these price shifts may simply represent part of a broader consolidation phase within the ongoing bull market rather than initiating a multi-year downturn. Ultimately, Bitcoin’s immediate future will hinge on its ability to reclaim the 365-day moving average. A swift recovery could alleviate current selling pressures, while continued rejections may heighten the risks for a deeper market correction.
