Bitcoin (BTC) Faces Correction Concerns After Retesting the $100,000 Level

Bitcoin (BTC) price dropped sharply on Jan. 8 after retesting the $100,000 level, forming a bearish engulfing candle on the daily chart. The drop came as key U.S. economic data signaled strength in the labor market.

The BTC price flash crashed from $102,760 to $92,500 on Jan. 8 after data showed a stronger-than-expected increase in private payrolls in the United States. The data put pressure on equities and crypto markets, as traders anticipated a response from the Federal Reserve.

However, analysts pointed to the increasing supply of stablecoins as a potential driver of future capital inflows into Bitcoin. Crypto analyst Miles Deutscher noted that stablecoins had entered “price discovery,” indicating the availability of liquidity that could support a BTC recovery in the coming months.

“Stablecoins now in price discovery, signaling liquidity for the capital to flow back into BTC in the upcoming months,” Deutscher said in a Jan. 8 tweet.

Stablecoin supply signals liquidity expansion

Similarly, market analyst Jamie Coutts highlighted the increase in liquidity, which, when paired with strong dollar performance, could lead to higher Bitcoin prices within six months.

“Six months ago, the dollar was tanking and there was no liquidity in the market, hence the BTC price drop,” Coutts stated in a Jan. 8 analysis.

“Now, the dollar is strong and there's a huge amount of liquidity left in the market, setting up for new BTC price highs within six months.”)

Data from Binance spot markets showed a progressive rise in USD volumes throughout the year, with America’s market share hitting an all-time high of 42% in the 2024-2025 session. The growth in USD volumes highlights the strength of the current market and suggests robust demand for BTC.

Binance spot volumes reach all-time high

Despite these positive liquidity signals, Bitcoin’s 5.15% drop on Jan. 8 erased four days of bullish momentum. Historical data shows that BTC has only recovered immediately after such dips 20% of the time.

Out of 15 pullbacks of 5% or more since January 2024, Bitcoin has registered an immediate rebound on just three occasions, suggesting a low probability of an uptrend in the short term.

“Four days of green candles erased after a 5% drop, historically BTC has only recovered immediately after such dips 20% of the time,” Miles Deutscher noted in a Jan. 8 analysis.

“This time around, we're in a bull market and after a 5% drop, BTC has recovered immediately three out of 15 times since January 2024.”)

Crypto trader Krillin predicted that Bitcoin could consolidate between $92,000 and $90,000 throughout January before a potential market pump in February.

“Consolidating between $92,000 and $90,000 for the rest of the month before another market pump in February,” Krillin stated in a Jan. 8 analysis.

“Taking out equal lows of around $90,000 before aiming for new highs.”)

If Bitcoin closes below $90,000 on the daily chart, analysts warn of a deeper crash. A confirmed inverse head-and-shoulders pattern could lead to a further 20% drop, potentially targeting $71,500.