Contrary to predictions, Bitcoin’s price fell by 3% at the beginning of this week, with the price reaching $92,500. Bitcoin’s price rally in the previous weeks, driven by derivatives trade, has lost its momentum and has triggered over $680 million in long position liquidations in the last 24 hours. This drop highlights thin futures liquidity, which has made prices vulnerable to sharp reversals. This is causing a downfall in Bitcoin’s price in early 2026, a retreat from the expected $96,000 mark.
This development has obviously hit the altcoin market too. At the beginning of this week, SOL is down by 6.7%, SUI is down by 10%, and ZCash is down by 10% in the Asian market. However, gold prices have climbed due to the news of a 10% tariff on Denmark and seven other European countries by Trump, pending a deal for the complete purchase of Greenland. The global markets’ reaction is mixed, and analysts are cautious in their stand, expecting a bearish rally for Bitcoin in the coming months.
Issues with Bitcoin’s Thin Liquidity
Bitcoin’s push to $96,000 wasn’t fueled by steady buying from regular investors, but by temporary “mechanical” forces in derivatives trading, like short liquidations. Thin liquidity has been a major issue that has been pestering Bitcoin’s upward journey. That means there have not been enough buy and sell orders available for Bitcoin, with the currency having a very low trading volume in the futures market.
According to Glassnode’s data, long-term holders bought heavily between April and July 2025 near cycle highs, creating a dense “supply zone” from $93,000 to $110,000. The recent rebounds have been capped at this point. Due to thin liquidity and a weak spot buying trend for Bitcoin, the predicted upward rally for the token has faded, leading to a price drop of Bitcoin below $93,000 and $680 million in long liquidations. It is expected that the prices will stay fragile and shaky until the real demand for Bitcoin sets in.
A Potential Bear Market Rally
Some analysts have projected the Bitcoin market to have a bearish undertone in the coming months rather than the beginning of a potential upward trend for the currency. This move had been slowly materializing since November last year; however, its effects have only started surfacing now.
A recent report by CryptoQuant states that Bitcoin’s inability to cross its 365-day moving average near $101,000 has served as a barrier to the currency’s upward momentum. This has also contributed to Bitcoin’s drop in price.
Despite the momentary price rise of Bitcoin, the demand signals have remained weak. Spot buying from regular investors hasn’t surged enough to drive a true uptrend; U.S. spot ETF inflows remained modest, and overall demand kept contracting slightly. This mirrors the 2022 patterns, where rallies failed at this average, which then led to further price drops.
The less aggressive selling trend shown by long-term holders was a positive stabilizer for the currency. Spot flows on exchanges like Binance now favor buyers, and Coinbase selling has eased, providing some support for the currency.
The market outlook is mixed for Bitcoin, as per analysts. Without steady spot accumulation, price has been reacting sharply to derivatives leverage and liquidity changes, explaining the recent slide below $93,000 and $680 million long liquidations.
