Bitcoin’s impressive rally over the past year appears to be losing steam as weakening demand and declining network activity raise concerns about a potential price drop. According to a new CryptoQuant analysis, Bitcoin could retreat to $86,000 if these bearish signals persist.
With Bitcoin currently trading near $97,040, investors are closely monitoring key support levels and market trends to determine whether this is just a temporary correction or the start of a bigger downturn.
Why Bitcoin Could Drop to $86K – CryptoQuant’s Analysis
1. Declining Demand Signals Weak Market Interest
Bitcoin’s demand has fallen significantly since late 2024. According to CryptoQuant data, BTC demand has dropped from 279,000 BTC in December 2024 to just 70,000 BTC in February 2025.
Bitcoin Demand Decline Table
| Date | BTC Demand (Estimated) |
|---|---|
| Dec 2024 | 279,000 BTC |
| Jan 2025 | 150,000 BTC |
| Feb 2025 | 70,000 BTC |
A sharp reduction in demand suggests that institutional and retail investors are holding back on Bitcoin purchases, contributing to its recent price stagnation.
CryptoQuant analysts warned,
The sharp decline in demand signals that Bitcoin is losing some of its momentum, which could push prices further downward.
2. Network Activity at Its Lowest in Over a Year
Another concerning factor is Bitcoin’s deteriorating network activity. The number of active BTC addresses and transactions has declined significantly, mirroring periods of market slowdowns in previous cycles.
Bitcoin Network Activity Stats
| Metric | Dec 2024 | Feb 2025 | % Change |
|---|---|---|---|
| Active Addresses | 950K | 750K | -21% |
| On-Chain Transactions | 380K | 280K | -26% |
A drop in network activity suggests that Bitcoin holders may be waiting on the sidelines, reducing on-chain movement and overall liquidity.
A CryptoQuant analyst stated,
“Bitcoin’s network activity is at its lowest point in over a year, indicating weak market participation. Historically, similar conditions have led to downward price movements.”
Liquidity Issues – Is There Enough Buying Power?
While the total stablecoin market cap has reached a record $200 billion, its growth rate is slowing. A key metric, USDT’s 60-day market cap change, has plunged by 92%, dropping from $20.4 billion in December 2024 to just $1.5 billion.
Stablecoin Market Liquidity Table
| Date | USDT Market Cap Change |
|---|---|
| Dec 2024 | $20.4B |
| Jan 2025 | $10.2B |
| Feb 2025 | $1.5B |
This slowdown in stablecoin liquidity reduces the capital available for new Bitcoin purchases, putting further downward pressure on BTC prices.
Technical Analysis – Key Support Levels to Watch
With Bitcoin hovering around $97,000, analysts are closely monitoring major support and resistance levels.
Bitcoin Support & Resistance Levels
| Level | Price (USD) | Status |
|---|---|---|
| Major Resistance | $100,000 | Strong Ceiling |
| Current Price | $97,040 | Testing Support |
| Key Support | $91,500 | Critical Level |
| Bearish Target | $86,000 | Potential Drop |
If Bitcoin fails to hold the $91,500 support level, a breakdown to $86,000 could follow. However, a recovery above $100,000 could invalidate the bearish scenario.
Market Sentiment – Is a Correction Coming?
Bitcoin’s Fear and Greed Index has entered the “Extreme Greed” zone, a level often associated with market tops and potential corrections.
Bitcoin Fear & Greed Index Chart
Final Thoughts – Is Bitcoin Heading to $86K?
Bitcoin’s recent weakness is fueled by:
Declining demand – A sharp drop from 279,000 BTC to 70,000 BTC
Lower network activity – Fewer active addresses and transactions
Liquidity slowdown – USDT market cap growth has dropped by 92%
Extreme Greed sentiment – Historically signals potential corrections
If Bitcoin fails to hold $91,500, a decline to $86,000 is increasingly likely. However, if bulls push BTC past $100K, we could see a reversal in the trend.
FAQs
Why is Bitcoin at risk of falling to $86K?
Analysts cite declining demand, weak network activity, and liquidity concerns as the main factors behind Bitcoin’s potential drop.
What is the critical support level to watch?
The $91,500 support is key. If BTC falls below it, $86K becomes the next major target.
How does the Bitcoin Fear and Greed Index affect price trends?
The index has hit Extreme Greed (90), which often signals a market top or correction.
Can Bitcoin still recover to new highs?
If BTC rebounds above $100K, bullish momentum could resume, invalidating the bearish scenario.
What role do stablecoins play in Bitcoin’s liquidity?
Stablecoins like USDT provide capital inflows to the market. Slower growth in stablecoins means less fresh liquidity for Bitcoin.
Glossary of Key Terms
Bitcoin (BTC): The world’s largest cryptocurrency by market cap.
CryptoQuant: A blockchain analytics firm providing market insights.
Support Level: A price point where buying interest prevents further decline.
Fear and Greed Index: A sentiment indicator showing market emotions from Fear (0) to Extreme Greed (100).
Stablecoins (USDT): Cryptocurrencies pegged to fiat money to maintain stability.
Sources
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