Bitcoin Falls Below $87,000: Is the Crypto Winter Coming or Just a Mid-Game Rest?

On January 26, Bitcoin dropped below the key $87,000 level in the early hours, hitting a new low since January 14, with a total decline of over 10%. This move not only shattered market expectations of a "rebound rally" after the New Year but also triggered deep concerns among investors about whether this bull market has peaked. Currently, the crypto market is filled with cautious or even pessimistic sentiment, with many well-known analysts lowering their forecasts. An intense debate about "where is the bottom" is underway.

Technical Breakdown: From Dream of Six Figures to the $80,000 Defense Line

Reviewing recent trends, Bitcoin has failed to effectively break through the psychological $100,000 mark since the beginning of the year. Trader Eugene Ng Ah Sio's statement is representative—this professional, who initially expected New Year momentum to push prices above six figures and "catch up with other risk assets," now chooses to "temporarily exit all markets." His confusion is not unique: from higher timeframes (HTF), the pattern is indeed not ideal, and prices are likely to go lower.

Technical analyst Merlijn The Trader points out via a heatmap of cost distribution that around $84,000 is an important accumulation zone over the past six months, with approximately 940,000 BTC traded in this range. This position forms the first short-term defense line. If this line is broken, $80,000 will become a critical test—historical data shows about 127,000 BTC were bought at this price range, and this relatively thin holding suggests that once broken, the downside could open rapidly.

What worries the bulls even more is the "bearish signal" issued by analyst Titan of Crypto: the MACD on the two-month cycle shows a bearish crossover, and historical experience indicates that such technical patterns often lead to a 50% to 64% retracement. Based on this, from the recent high of $109,000, the potential bottom could dip to $58,000 or even lower.

Diverging Institutional Views: From Cautious Waiting to Bearish Warning

Faced with the current situation, institutional investors' strategies are clearly diverging. Chris Burniske, partner at Placeholder VC, remains on the sidelines. He lists several support levels to watch: $80,000, $74,000, $70,000, $58,000, and below $50,000. His logic is clear and cold—short-term ups and downs are not the main concern. If prices rebound, hold and gradually diversify; if a deep correction occurs, see it as an opportunity to add positions. This "space for time" approach essentially waits for the market to give clearer signals of the bottom.

In contrast, Bloomberg Intelligence senior commodities strategist Mike McGlone's warning is more pessimistic. He points to Ethereum, which is "trending toward the lower end of the $2,000 to $4,000 range since 2023," and states that "the risk of falling below $2,000 is higher than the chance of re-establishing above $4,000, especially as stock market volatility re-emerges." This assessment is noteworthy—Ethereum is often seen as a risk appetite indicator for the crypto market. If it continues to weaken, it could drag down the valuation center of the entire market.

Macro Fog: Trump's "TACO" and Liquidity Dilemmas

The recent decline is also influenced by macro factors. Crypto influencer and former FTX community partner Benson Sun's "Trump TACO (Trump Always Chickens Out)" phenomenon resonates: although Trump retreated again on tariffs and other issues, causing US stocks to rebound to the previous lows, Bitcoin remains significantly below its starting point.

This divergence—"following the decline but not the rise"—exposes the current structural dilemma in the crypto market: off-market funds still lack strong interest in Bitcoin. Benson Sun predicts that the subsequent trend may fluctuate widely between $85,000 and $95,000, and advises bulls "not to be overly ambitious, and to trade flexibly."

Liquidity data also supports this view. Although the Federal Reserve canceled the daily $50 billion overnight reverse repurchase agreement (RRP) limit at the December FOMC meeting, allowing banks to borrow from the Fed with unlimited collateral of Treasuries, the market has not gained sustained risk appetite. Over the past five weeks, spot Bitcoin ETFs saw a net inflow of $6.63 billion, and BlackRock's crypto investment portfolio grew from $54.77 billion at the start of the year to $102.09 billion, but these inflows seem more for hedging than for pushing prices higher.

Is $58,000 the True Bottom?

Current discussions about the final bottom mainly focus around the $58,000 level. This price point aligns with the technical analysis by Titan of Crypto and resonates with several analysts' expectations that a bear market may begin around 2026. Historically, Bitcoin tends to reach its bull market peak 12-18 months after halving, with the 2024 halving suggesting a potential cycle top in mid-2025 to early 2026.

If this cycle pattern remains valid, the current market may be in a "late bull phase" with intense volatility. VanEck previously predicted that after the first cycle peak (around $180,000), BTC could see a 30% retracement, and altcoins could drop as much as 60%. While this target now seems overly optimistic, the idea of "summer market consolidation" may still be worth considering.

Overall, the market is at a critical decision point. The $84,000–$80,000 support zone is crucial in the short term; if it holds, the market could recover sentiment amid consolidation. If the $80,000 psychological level is broken, the next test will be the historical accumulation zone at $58,000 and below. For investors, Burniske's strategy may serve as a reference: remain patient until the trend clarifies, view deep corrections as opportunities to position rather than reasons to panic.

The harsh reality of the crypto market is that it always swings between extreme optimism and extreme pessimism. When "$100,000" shifts from a consensus target to an unreachable high, and traders choose to "temporarily exit all markets," it may be the beginning of market re-pricing and finding a new equilibrium. No matter whether the bottom lands at $80,000, $70,000, or $58,000, the ability to survive cycles has never depended on perfect timing but on clear risk awareness and steadfastness in long-term value.