Bitcoin Plunge Below $90K Signals Deeper Correction Ahead

Three key on-chain metrics from CryptoQuant analysis indicate Bitcoin’s current correction may extend further. The Average Bitcoin Deposit Volume on Binance has climbed past the critical threshold of 0.9, a level historically associated with negative price reactions. This metric specifically signals growing investor intent to sell holdings, suggesting the recent price drop below $90,000 reflects genuine market sentiment rather than temporary volatility.

Compounding this bearish outlook, Bitcoin reserves held on Binance have ballooned to over 580,000 BTC. Analyst CoinDream emphasized that such large accumulations on exchanges typically indicate potential sell pressure waiting to be unleashed. This creates persistent bearish weight on the market unless met with equally strong buyer demand, which current indicators show is conspicuously absent.

The third critical metric shows network-wide Net Exchange Flows exceeding 5,000 BTC in a single day, representing the largest sell pressure since Bitcoin initially broke below the $110,000 level. CoinDream concluded that this acceleration in selling pressure, combined with missing buyer demand, suggests the market has not yet found a genuine bottom, which typically requires strong demand inflows that current indicators fail to show.

The bearish on-chain data coincides with significant technical breakdowns across Bitcoin’s market structure. At the time of reporting, BTC was trading around $90,700, down 5.4% in 24 hours and nearly 14% over the past week. More critically, Bitcoin decisively broke below its weekly 50-period Exponential Moving Average, a key support level that had held throughout the bull market, adding credence to the emerging bearish structure.

This technical breakdown forms part of a wider market wipeout totaling more than $1.1 trillion, described by some observers as a “structural reset” for the cryptocurrency industry. The magnitude of this correction suggests fundamental market dynamics have shifted, with the combination of technical breakdowns and bearish on-chain data creating a perfect storm for continued price pressure.

Adding to the negative momentum, institutional demand has notably cooled according to CryptoQuant CEO Ki Young Ju. The Coinbase Premium has reached a nine-month low, indicating reduced institutional buying pressure from U.S. markets. Simultaneously, spot Bitcoin ETFs are experiencing sustained outflows, removing a crucial source of demand that had previously supported price levels during earlier market corrections.

This institutional pullback represents a significant shift from earlier market dynamics where institutional inflows through ETFs provided substantial market support. The current environment shows both retail and institutional participants retreating, creating a vacuum of buying interest that allows selling pressure to dominate price action across major exchanges including Binance and Coinbase.

Despite the overwhelmingly bearish indicators, some analysts see potential for limited short-term reprieve. A separate market update from NovAnalytica suggested that aggressive taker sell volume may be approaching exhaustion, potentially creating an entry zone for large buyers. However, this remains speculative against the broader backdrop of negative momentum and absent demand indicators.

CoinDream maintains that caution is advised as further downside remains likely, noting that current on-chain data, including market buy volume and other demand indicators, do not yet signal a bottom. The combination of elevated exchange reserves, increased deposit volumes, and substantial network flows to exchanges creates a environment where any price recovery would require significant buyer momentum that currently shows no signs of materializing.