The cryptocurrency market is undergoing a broad downturn adjustment. Mainstream assets like Bitcoin (BTC) and Ethereum (ETH) are leading the decline, with several sectors also experiencing significant drops.
🔴 Overall market performance
· Major tokens: Bitcoin (BTC) has dropped about 1.71%, with the price falling below $87,000; Ethereum (ETH) has dropped about 4.27%, with the price near $2,800.
· Leading declining sector: The Layer 2 sector is leading the decline, with an overall drop of about 6.71%. Among them, tokens like Zora (ZORA) and Linea (LINEA) have seen declines exceeding 10%.
📈 Minor counter-trend sectors
· Performance: Overall, the market is declining, but some sectors or tokens are rising against the trend.
· Specific Cases: The CeFi sector is down overall, but the Canton Network (CC) has risen 8.54% against the trend; the Meme sector is down overall, but MemeCore (M) and PIPPIN (PIPPIN) have risen 3.14% and 16.61%, respectively.
💰High Leverage Market Dynamics
· Total Liquidation Amount in 24 Hours: Over $540 million, involving more than 153,000 traders.
· Major Liquidation Assets: Ethereum (ETH) has the highest liquidation amount at approximately $167 million; followed by Bitcoin (BTC) at about $159 million.
📉 Core Issue: Long-term holders continue to cash out
A core pressure of this market adjustment comes from long-term Bitcoin holders. On-chain data shows that their selling behavior is still ongoing:
· Scale of Sell-off: Since the beginning of 2023, approximately 1.6 million Bitcoins that have not moved for at least two years have been reduced, valued at about $140 billion. In 2025 alone, nearly $300 billion worth of Bitcoins that had been dormant for over a year will re-enter circulation.
· Market Impact: In the past year, such sell-offs were once absorbed by demand from newly launched Bitcoin spot ETFs. However, the situation has changed recently, with ETF funds turning into net outflows, while derivative trading volumes and retail participation are also decreasing, resulting in insufficient market support, leading to a state of 'slow bleeding'.
📊 Key Technical Analysis Insights
Bitcoin
· Key Resistance and Support: A clear breakthrough of $88,000 is needed in the short term to reverse the downward trend. If it cannot break through, prices may continue to search for liquidity, with support to watch below at $83,000 and even $80,000.
· Liquidation Zone: Data monitoring shows that a large number of long and short positions have formed a liquidation zone near $84,000 and $89,000. Prices reaching these areas may trigger severe liquidity fluctuations and market reactions.
🔮 Market Comprehensive Outlook
1. Sell Pressure May Be Nearing Its End: The sell-off by long-term holders may be close to saturation. Historical data shows that when about 20% of the Bitcoin supply is reactivated within two years, such concentrated sell-offs tend to weaken significantly.
2. Macroeconomic Impact: This week, there are several macroeconomic events that may exacerbate market volatility and increase the likelihood of prices testing the aforementioned support levels.
3. Current Market Sentiment: The overall market sentiment is cautious and wait-and-see. The open interest in the derivatives market is still below the levels before the October crash, indicating that a large number of traders have not yet returned. The previous three annual declines were associated with major negative industry events, while this correction occurs without similar bearish news, leaving some investors confused.
💎 Summary
In simple terms, the current market is facing selling pressure from long-term holders taking profits, while buying liquidity is relatively insufficient. The technical situation is at a critical decision point, with $88,000 being an important observation level in the short term.
