Bitcoin price has entered one of its sharpest pullbacks in recent years. Since the January high near $97,000, BTC price has dropped more than 30%. This week aloneBitcoin price has entered one of its sharpest pullbacks in recent years. Since the January high near $97,000, BTC price has dropped more than 30%. This week alone

Why Is Bitcoin (BTC) Price in Free Fall and How Low Could It Go Next?

4 min read

Bitcoin price has entered one of its sharpest pullbacks in recent years. Since the January high near $97,000, BTC price has dropped more than 30%. This week alone saw a drop from around $78,000 to a low close to $59,000. Such a fast decline forces a closer look at the deeper forces now driving Bitcoin.

Market analyst 0xNobler believes the current BTC price behavior cannot be explained by traditional supply-and-demand logic. His argument focuses on synthetic exposure created through futures, options, ETFs, and lending structures that sit on top of real Bitcoin. These financial layers allow several claims to exist on a single unit of BTC, which changes how valuation forms in the market.

This structure weakens the original scarcity narrative that supported early Bitcoin price growth. Price discovery moves away from on-chain activity and into derivatives positioning, hedging, and liquidation mechanics. Similar transformations appeared in gold, silver, oil, and equities after derivatives became dominant trading tools.

0xNobler sees the present Bitcoin decline as part of that same structural transition rather than a simple sentiment-driven selloff.

Such a framework also explains the speed of recent BTC price drops. Large players can influence direction through positioning pressure instead of direct spot selling. Volatility, therefore, becomes a structural feature of the market environment.

Liquidity Stress Across Crypto Markets Is Pressuring BTC Price

Macro research group The Kobeissi Letter points to a broader liquidity problem across digital assets. Since early October, total crypto market value has fallen about 50%, removing roughly $2.2 trillion in capitalization. Bitcoin has also erased its entire post election advance despite little visible change in core fundamentals over the last two months.

Their timeline highlights a turning point in October followed by unstable range movement through mid January. Repeated liquidation gaps weakened confidence and pushed sentiment steadily lower. Billions in leveraged positions have been cleared during recent weeks, and market depth remains far below earlier levels. Thin liquidity allows large orders to move BTC price quickly, which matches the sudden intraday drops seen during the latest decline.

Selling pressure has also appeared in major technology stocks, pointing to a wider liquidity event across asset classes. The Kobeissi Letter believes stability will return only after leverage resets and bearish sentiment reaches exhaustion. Until that reset occurs, turbulence may continue to define short term Bitcoin price action.

Technical Structure Suggests Bitcoin Price Could Fall Toward $40,000

Technical analyst Crypto Patel had warned about downside risk long before the latest correction accelerated. His earlier projection described a potential fall from above $100,000 toward deeper support zones after bearish divergence formed on higher time frames. Bitcoin later declined toward the mid $60,000 region, validating much of that outlook.

Current chart structure now places attention on lower historical support. Crypto Patel notes that failure to stabilize above recent zones could open the path toward the $40,000 region during an extended correction. Large retracements have appeared in previous Bitcoin cycles even during long term upward trends. This historical behavior keeps the deeper support scenario within reach if liquidity stress continues.

@CryptoPatel / X

Despite this risk, Crypto Patel still maintains a constructive long-horizon view for Bitcoin. Past drawdowns eventually faded when seen across multi-year cycles. Present weakness, therefore, represents a severe correction inside a broader narrative that remains unresolved.

Future Bitcoin direction depends on liquidity recovery, leverage reduction, and renewed confidence across global markets. Structural forces identified by 0xNobler, The Kobeissi Letter, and Crypto Patel all point toward the same conclusion. Market mechanics now influence BTC price as much as adoption narratives once did.

Read Also: Silver Price at $70 Again… Last Time It Was Euphoria, Now It’s Panic

Bitcoin has survived repeated collapses throughout its history before forming new highs later in the cycle. Current conditions may represent another moment of stress that tests conviction across the market. Observers now focus on whether BTC price can stabilize above key support or continue searching for a deeper floor near historical demand zones.

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The post Why Is Bitcoin (BTC) Price in Free Fall and How Low Could It Go Next? appeared first on CaptainAltcoin.

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