Bitcoin (BTC) Has Plunged More Than $20,000 in the Past Few Weeks, Hitting Multi-Month Lows

Bitcoin (BTC) has plunged more than $22,000 in the past few weeks, hitting multi-month lows. While traders hope for a rebound, market analysts caution that a recovery may take time as liquidity remains scarce.

Bitcoin (BTC) price has hit multi-month lows after plunging more than $22,000 in the past few weeks, sparking hopes of a rebound among traders.

However, crypto market analysts say it may take time for the market to recover from the recent downturn as liquidity remains scarce.

According to CryptoQuant CEO Ki Young Ju, Bitcoin’s price movement will likely remain muted until liquidity returns.

In a recent post on X, Ju pointed out that Bitcoin is currently straddling the boundary between a bull and bear market, with weak demand from spot BTC exchange-traded funds (ETFs) exacerbating the slowdown.

Bitcoin Is in ‘Distribution Phase’ as ETF Outflows Hit Record Levels

Ju stated that Bitcoin is currently in a “distribution phase,” where prices decline as new liquidity dries up.

He added that the market conditions are similar to early 2024, suggesting Bitcoin may consolidate in a large band, possibly between $75,000 and $100,000, for an extended period.

Bitcoin ETFs, which were instrumental in driving prices to all-time highs, have seen record outflows in recent weeks.

Among the major issuers, BlackRock (NYSE:BLK), the world’s largest asset manager, has faced over $1.2 billion in outflows from its flagship iShares Bitcoin Trust (SO:1553826) in just two days.

However, Ju countered claims that BlackRock itself was selling Bitcoin, deeming such narratives "ridiculous fear-mongering" from so-called top-tier analytics firms.

Instead, he explained that the ETF is structured in a way that allows for "creation and redemption units," which are used by institutional investors to invest in Bitcoin in large amounts.

When these institutions withdraw their investments, the ETF sells Bitcoin to these investors to close out their positions, hence triggering a series of selloffs.

Despite the current downturn, Ju noted that BTC is still following its typical two-year market cycle.

He expects the bull market to continue until at least April 2025, rendering the next few months a critical inflection point for BTC to either resume its uptrend or enter a steeper correction.

Is Bitcoin Bottoming Out, or Is There More Pain Ahead?

BTC’s prolonged decline has fueled concerns of a deeper market correction, especially as its total market capitalization is nearing the previous cycle’s high, and major crypto lender Genesis is reportedly planning for bankruptcy.

As the crypto market navigates this downturn, market observers are debating whether Bitcoin has bottomed out or if further downside is imminent.

BitMEX co-founder Arthur Hayes previously predicted Bitcoin could fall to the $70,000 range amid increased sell pressure and uncertainty surrounding Donald Trump’s pro-crypto stance.

However, in a recent post on X, Hayes said Bitcoin’s price action suggests “one more violent wave down below $80K, most likely over the weekend, then crickets for a while.”

His analysis indicates that Bitcoin is likely nearing the bottom of its current correction, which could see another leg down to the $70,000-$72,000 zone before a final push to new all-time highs.

Market analysts, on the other hand, point out that Bitcoin corrections of up to 30% are still considered within the normal range of a bull market.

With Bitcoin down 28% from its peak and trading around $78,331 at press time, they anticipate a potential bottom between $75,000 and $77,000.

This aligns with Bitcoin testing the Fibonacci golden ratio range, which ranges from $79,000 to $72,000, according to one analyst.

Meanwhile, the Fear and Greed Index has plunged to 10—levels not seen since June 2022.

But with stablecoin supply surging past $215 billion, it seems that capital is simply sidelined and not lost.

Once there is a clear catalyst for liquidity to return, it could quickly flow back into BTC and altcoins, setting the stage for a rapid rebound.

For now, the market is in a holding pattern, awaiting signs of renewed demand or a steeper selloff to determine the next decisive move by BTC.