Bitcoin (BTC) has been trading in a tight range between $94,000 and $100,000 since early February, showing signs of consolidation as market sentiment remains cautious. At the time of writing, the price hovers around $98,000, reflecting a period of indecision among traders. Despite this apparent stability, underlying metrics suggest weakening institutional demand and deteriorating liquidity conditions—factors that could pave the way for a deeper correction.
Recent data from U.S. Bitcoin spot ETFs reveal a troubling trend: a net outflow of $489.6 million recorded by Thursday of this week. This follows last week’s outflow of $580.2 million, signaling sustained selling pressure from institutional investors. Combined with declining on-chain activity and historically low volatility, these developments point to a market lacking strong directional momentum.
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Institutional Demand for Bitcoin Shows Signs of Weakness
The ongoing price consolidation belies a deeper issue—waning institutional interest. U.S. Bitcoin spot ETFs, once a major driver of bullish momentum following their January 2024 approval, are now experiencing consistent outflows. According to Coinglass, total net outflows reached $489.6 million this week alone, continuing a trend that began in mid-February.
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Such sustained outflows suggest that large players are either taking profits or reallocating capital elsewhere. If this pattern persists or accelerates, it could trigger further downside pressure on Bitcoin’s price.
CryptoQuant’s latest analysis reinforces this concern. Their data shows that Bitcoin’s apparent demand growth—a metric measuring transaction volume relative to supply—has sharply declined since peaking at 279K on December 4, 2024. As of this week, it has dropped to just 70K. This slowdown follows the post-election rally surge and indicates diminishing buying interest even during what should be a seasonally strong period.
With demand faltering and liquidity tightening, analysts warn that Bitcoin could face a correction down to $86,000 if conditions fail to improve. That level aligns with the Trader’s On-chain Realized Price minimum band—a historically reliable support zone during bull markets.
FTX Repayments Spark Temporary Market Dip
On Tuesday, Bitcoin briefly dipped to $93,388 before recovering to close above $95,600. This short-term selloff coincided with news that the defunct FTX exchange had begun distributing repayments to creditors.
Per Arkham Intelligence, users with claims under $50,000 started receiving funds via Kraken and Bitgo. This initial wave covers approximately $1.2 billion in value, with total payouts expected to reach up to $16.5 billion by May 30, when larger claimants will also begin receiving repayments.
While the actual disbursement is not direct selling of Bitcoin by FTX, market participants reacted nervously. The fear stems from the possibility that recipients may choose to sell their newly recovered assets, adding downward pressure on prices. Although the immediate impact was limited, the psychological effect contributed to increased caution among traders.
Bitcoin Volatility Hits Multi-Month Lows
One of the most striking features of this market phase is Bitcoin’s unusually low volatility. K33 Research’s Ahead of the Curve report for February 18, 2025, highlights that trading volumes, options premiums, and ETF flows have regressed to levels last seen before the U.S. presidential election in November 2024.
As of February 13, 37% of the top 100 U.S. equities exhibited higher 30-day volatility than Bitcoin—an anomaly not observed since October 2023. Historically, such periods where traditional stocks are more volatile than BTC tend to be short-lived, often preceding sharp shifts in crypto market dynamics.
Moreover, CryptoQuant reports that Bitcoin’s network activity has fallen to its lowest level in over a year. The Bitcoin Network Activity Index now stands at 3,658—down 17% from its November 2024 peak—and has dropped below its 365-day moving average for the first time since China’s mining ban in July 2021. This signals a potential shift into a bearish phase for on-chain engagement.
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Low network activity typically reflects reduced user participation and transactional demand—both red flags for long-term health. When combined with weak institutional inflows and falling realized profit margins, the outlook turns increasingly cautious.
Is Bitcoin’s Consolidation Ending Soon?
For over two weeks, Bitcoin has traded within a narrow range between $94,000 and $100,000. A break in either direction could set the tone for the coming weeks.
On the upside, a daily close above $100,000 could open the path toward retesting the January 30 high of $106,457. Technical indicators offer some hope: the Moving Average Convergence Divergence (MACD) generated a bullish crossover on Thursday’s daily chart, signaling potential upward momentum.
However, the Relative Strength Index (RSI) remains around the neutral 50 level, suggesting lackluster momentum and investor indecision. For a sustainable rally to begin, the RSI must climb above 50 and maintain upward acceleration.
Conversely, failure to hold above $94,000 could lead to a breakdown toward $90,000—a psychologically significant threshold. A drop below this level might accelerate selling, especially if accompanied by renewed ETF outflows or negative macroeconomic news.
Frequently Asked Questions (FAQs)
Q: Why are Bitcoin ETF outflows concerning?
A: Persistent outflows from U.S. spot Bitcoin ETFs indicate weakening institutional demand. Since these funds were major buyers in early 2024, sustained selling can reduce overall market liquidity and dampen bullish sentiment.
Q: What does low Bitcoin volatility mean for traders?
A: Low volatility often precedes sharp price movements. Periods where BTC is less volatile than major stocks rarely last long and may signal an upcoming breakout—either up or down.
Q: How do FTX repayments affect Bitcoin’s price?
A: While FTX isn't directly selling BTC, creditors receiving repayments might choose to liquidate holdings. This potential supply overhang creates uncertainty and can trigger short-term selling pressure.
Q: What is Bitcoin network activity, and why does it matter?
A: It measures real-world usage of the Bitcoin blockchain through transactions and wallet interactions. Declining activity suggests reduced economic use and weaker fundamentals.
Q: Can Bitcoin rebound without strong demand growth?
A: A short-term bounce is possible due to technical factors or sentiment shifts, but sustained price increases require improving demand and liquidity—especially from institutional sources.
Q: What is the significance of $86,000 as a potential support level?
A: That level corresponds to the Trader’s On-chain Realized Price minimum band—a historically strong support zone during bull markets. It previously held in mid-2023 and late 2024.
Final Outlook
Bitcoin remains in a fragile equilibrium. While price action appears stable between $94,000 and $100,000, key indicators—from ETF flows to on-chain metrics—are flashing warning signs. Weak demand growth, declining network activity, and record-low volatility suggest the market is overdue for a directional move.
Without a resurgence in institutional buying or broader macro catalysts, downside risks dominate. A break below $94,000 could accelerate losses toward $86,000 or lower. Conversely, renewed accumulation—especially through ETF inflows—could reignite bullish momentum and target new highs.