Bitcoin’s price action failed to generate new interest. Instead, it printed a lower low and left sentiment vulnerable.
As BTC slid towards the $86,000 region, on-chain data pointed to weakening momentum and a possible continuation of the downtrend.
Fear dominated positioning and further declines remained possible.
Bitcoin has not yet reached a market bottom
Bitcoins [BTC] Net unrealized gain/loss (NUPL) continued to rise trend lower This indicates that a growing number of investors are panic selling, either to lock in gains or limit losses.
This behavior was in line with a broader sentiment. The Fear and Greed Index remained in the ‘fear zone’ at 29, based on CoinMarketCap data.
Historically, the NUPL has tracked the cycle structure well when measured against zero.
Source: Alpharactal
When NUPL falls into negative territory, it often marks a market bottom – a phase characterized by increasing accumulation, a market reset, and the early stages of a rally that increases Bitcoin’s market cap.
Over the past five cycles, every move into this negative zone has been preceded by a sharp recovery, pushing Bitcoin to new price highs each time.
At the time of writing, the NUPL remained positive. That structure suggested that downward pressure could continue while the metric trended lower.
Still, a momentum shift, marked by a rising NUPL, could stabilize conditions and support a recovery effort.
Accumulation increases, but conviction remains uneven
A negative NUPL would likely benefit BTC in the long run, potentially laying the groundwork for a move beyond the all-time high of $126,000. However, investors have yet to fully support that scenario.
Despite the uncertain price structure, investors continue to accumulate Bitcoin, indicating that many may view current levels as discount points.
There was still accumulation in the Delta Growth Rate, which compared market capitalization to realized capitalization.
The Delta Growth Rate had already turned negative, signaling a shift from speculation to fundamental accumulation. Historically, this phase reduced capitulation risk unless caused by macro shocks or systemic risk events.
However, demand on the spot market remained weak.
Source: Alpharactal
Centralized exchanges recorded approximately $213 million in net Spot to sell the past week.
In contrast, the week ending January 19 saw $943.7 million in spot buying, supporting price stability during the period.
That shift left BTC dependent on renewed inflows into the spot market to regain upward traction.
The chart structure emphasizes the recovery potential
From a technical perspective, the chart suggested that Bitcoin could attempt a recovery.
BTC has entered a key demand zone, highlighted in blue, which previously acted as a launching pad for rallies on three separate occasions. This zone could support higher prices again.
However, a recovery is unlikely to be smooth. Bitcoin must first overcome a resistance band between $89,228 and $90,180.
A decisive break above this range could open the door to filling the fair value gap (FVG) between $93,673 and $94,977. Fair value gaps often trigger price action because markets tend to revisit these zones over time.
Despite the lingering uncertainty, Bitcoin remains at a crucial level where shifts in sentiment, spot demand or on-chain momentum could determine the next big move.
Final thoughts
- Bitcoin’s NUPL remains above negative territory, indicating that many investors are still selling out of fear rather than accumulating out of conviction.
- Stronger spot buying and a rise in the NUPL, combined with a move above $90,000, could improve market confidence.