Hey everyone,
With Bitcoin struggling to find its footing after the recent dip from the $90k+ levels, the "macro bears" are out in full force again. But if we move past the price action noise and look at the underlying on-chain mechanics and macro variables, the last two months look less like a collapse and more like a classic "Mid-Cycle Wealth Redistribution."
Why did we see this drawdown?
Beyond the sensationalist headlines, there are three logical drivers at play:
Futures Market De-leveraging: In late 2025, we saw funding rates staying consistently high. The market became top-heavy with over-leveraged long positions. This correction was a necessary "flush" to wipe out the tourist leverage. Healthy bull markets are built on the backs of spot buyers, not high-leverage traders.
Institutional Rebalancing: After the record-breaking ETF inflows, we’ve hit a natural period of exhaustion. "Smart Money" is currently in wait-and-see mode, gauging the impact of 2026 fiscal policies. This isn't a "sell-off" so much as it is a "pause for clarity."
The "Risk-On" Rotation: We’ve seen a temporary rotation into high-growth AI equities. Bitcoin is currently consolidating, and these sideways phases are where the strongest hands accumulate while the "weak hands" rotate back into tech stocks.
A Rational Outlook: Where are we headed?
Technically, the $84k - $88k zone has established itself as a formidable floor. On the weekly timeframe, we are effectively painting a massive Bull Flag. My thesis is that we will continue this sideways chop through the remainder of Q1 2026. However, as exchange reserves continue to hit multi-year lows, a supply shock is mathematically inevitable. I’m eyeing the $115k - $125k range by mid-year once the macro dust settles.
The Playbook: How to Navigate This
DCA is King: Sub-$90k Bitcoin is historically a high-value accumulation zone in this stage of the cycle.
Focus on Infrastructure: Instead of staring at the 1-minute candle, look at the growth of L2s and Lightning. The utility of the network is decoupling from the daily price volatility.
Stay Sovereign: This is a reminder to move coins off exchanges. If you aren't managing your own keys, you aren't fully hedged against the legacy system's turbulence.
What’s your take? Are we bottomed out, or do you think we need one more leg down to truly reset the sentiment?
#bitcoin ، #market-analysis #economics
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This type of chart analysis is ineffective; charts do not draw flags, triangles, or anything similar. The price only does one thing: absorb liquidity and move in a fractal manner. A fractal consists of only three movements: first impulse, a pullback, and a second impulse or expansion. Right now, the price is pulling back, as the first impulse ended, starting from 15k to the previous ATH high. This pullback still has the capacity to see prices below 80k, and then at some point, the second impulse or expansion will begin, which will not lead to new highs.
Fair point on the terminology. Whether we call it a 'Bull Flag' or a 'fractal pullback for liquidity absorption,' we’re basically looking at the same price action through different lenses. Labels aside, the core of my thesis is the spot demand vs. supply exhaustion we’re seeing on-chain.
I’m curious though—if we get that sweep below $80k you're expecting, what’s the logic behind the second impulse failing to make new highs? With exchange reserves at multi-year lows and the halving effects fully baked into the supply side by now, a failed expansion would be a massive outlier. Would love to hear your reasoning on why the macro trend would break there