• Bitcoin dropped below $100K, hitting $78K, raising bear market concerns.
• Recent buyers suffered 74% of losses, leading to nearly $490M in liquidations.
• Bitcoin rebounded to $85K, but a breakout is needed for a bullish reversal.

Bitcoin—BTC, often follows a pattern before reaching the top. Every cycle, the price breaks above the blue line of the Power Law Corridor. This time, the market failed to push through that level. A sharp drop followed, leaving traders questioning the next move. With prices falling below $100,000 and hitting fresh lows, many wonder if the bull run has ended or if a rebound could be near.

Heavy Selling Pressure Hits Bitcoin

The decline started on January 7 when Bitcoin dropped under $100K. The price fell further, reaching $89,397 on January 13. A short recovery came next, but another crash on February 3 sent prices to $91,000. Bears kept control, driving the market toward $80,000. Panic spread as traders rushed to cut losses. Glassnode data revealed that 74% of realized losses came from investors who had bought within the last month. These short-term holders, often called “Bitcoin tourists,” faced severe liquidations. Many compared the situation to the FTX collapse.

Will Bitcoin Recover?

Coinglass reported nearly $490 million in liquidations in 24 hours. Long traders lost $390.48 million, while short sellers faced around $99.9 million in losses. Open interest also dropped by 3.5%, bringing the total to $50.5 billion. The decline signaled weakening confidence among leveraged traders.

Support appeared near $78,000, helping Bitcoin bounce toward $85,000. The recovery followed fresh U.S. economic data. The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, dropped to 2.6%. Lower inflation numbers eased fears of aggressive rate hikes.

A funding rate of +0.004% shows that buyers still believe in a rebound. Some expect a push higher, but stronger momentum is needed. For now, it seems like the Bitcoin bear market started. History shows that without breaking the Power Law Corridor, Bitcoin struggles to hit new all-time highs.

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