Bitcoin’s latest retreat from recent highs has stirred debate among market observers who say the rally may be losing its internal strength just as traders brace for the Federal Reserve’s policy statement.
The asset briefly pushed above $92,000 before sliding toward $90,000, a move that would traditionally be blamed on pre-Fed caution. However, analysts suggest the hesitation reveals something deeper: the market is running short on committed buyers.
Key Takeaways
Bitcoin’s decline reflects fading demand, not just pre-Fed hesitation.
ETFs and spot flows show selling outweighing accumulation.
Many BTC holders sit on unrealized losses, echoing past stagnation phases.
Bitfinex researchers characterized the landscape as superficially stable but lacking real momentum underneath. In their view, the push higher is no longer being matched by a firm base of demand capable of absorbing ongoing selling.
Institutional Flows No Longer Anchoring the Market
A key concern is the behavior of Bitcoin-focused ETFs, which have shifted from accumulation to net selling. Rather than building exposure, institutional participants appear to be taking profits or de-risking, reducing the buying cushion Bitcoin previously enjoyed.
Spot market dynamics echo this trend. Liquidity is thinning, sell-side pressure outweighs bids, and traders seem hesitant to chase higher positions without stronger conviction.
Another pressure point stems from how coins are distributed. A significant share of Bitcoin supply is now sitting at unrealized losses, a pattern that resembles stagnation phases seen in past consolidation cycles. While capital inflows remain positive, analysts describe them as muted compared to historical bull markets, leaving advances shallow and easy to disrupt.
Analysts Warn the Market Is Exposed
The issue, according to Bitfinex, is not just that Bitcoin has cooled — it is that the foundation supporting its price appears thin. With fewer enthusiastic buyers and reduced institutional accumulation, the market may be more sensitive to macro headlines, risk sentiment shifts, or even the tone of the Fed’s announcement this week.
For now, price action remains choppy rather than chaotic, but sentiment appears indecisive. Whether Bitcoin stabilizes or unravels depends heavily on whether demand can return before pressure builds.
