Bitcoin Data Reveals No Significant Panic Selling In The Market – Shakeout Or Trend Shift?

Bitcoin faced a sharp retrace yesterday, dropping 8% from its all-time high of $108,300 after the Federal Reserve announced a 25 basis point rate cut alongside a revised policy signaling fewer cuts in 2025. Despite the drop, Bitcoin managed to hold above $98,000, a critical liquidity level that analysts are closely monitoring.

This recent price action raises a pivotal question: is this the start of a more significant correction or merely a shakeout to fuel the next leg of Bitcoin’s rally? CryptoQuant analyst Axel Adler provided key insights, noting that no substantial panic selling is evident in the market—a signal that investor confidence remains intact for now.

Bitcoin’s resilience at current levels suggests the market is recalibrating following the Fed’s latest moves. As traders and investors digest these developments, all eyes are on whether Bitcoin can recover momentum and push back toward its previous highs or if deeper retracements are on the horizon. With market sentiment hanging in the balance, the coming days will be crucial in determining Bitcoin’s next direction.

Bitcoin Remains Strong

Despite the recent dip and a noticeable shift in market sentiment, Bitcoin remains resilient above key liquidity levels, maintaining its long-term bullish structure. The price drop, sparked by broader market reactions to the Federal Reserve’s policy announcement, has raised concerns, but Bitcoin’s ability to hold critical support underscores its underlying strength.

Top CryptoQuant analyst Axel Adler recently shared data on X, shedding light on the market’s current dynamics. According to Adler, no significant panic selling is evident, even after Bitcoin’s sharp decline. 

He highlighted a chart tracking the BTC short-term holder profit-loss to exchanges, revealing that this metric is currently at a higher level than seen during early December selling events. This indicates that the recent sell-off may have been less driven by fear and more of a strategic shakeout.

This shakeout could serve to generate liquidity and provide the necessary momentum for Bitcoin’s ongoing rally. However, he also cautions that this could mark the beginning of a broader correction that might take time to fully develop.

The coming weeks will be pivotal for Bitcoin. As the market stabilizes, traders and investors are watching whether Bitcoin can reclaim higher levels or if further downside consolidation is on the cards.

Price Action: Technical Levels To Hold

Bitcoin is currently trading at $101,800, following a successful test of local demand at $98,695 earlier today. The price structure remains intact, with Bitcoin forming a clear pattern of higher highs and higher lows, signaling sustained bullish momentum. Despite the recent volatility, the market sentiment continues to lean optimistic as BTC holds above critical support levels.

For Bitcoin to maintain its upward trajectory, a decisive push above $103,600 is essential. This level served as a significant pivot last week, marking a key zone for both buyers and sellers. Breaking through this resistance would likely signal renewed momentum, setting the stage for further gains as Bitcoin eyes new highs.

However, failure to break above $103,600 could lead to a shift in sentiment. If BTC also loses the $100,000 psychological level, it would likely confirm the start of a broader correction. Such a scenario could drive the price toward lower support zones as the market recalibrates.

The next few days will be crucial in determining Bitcoin’s near-term direction. Traders are closely watching the $103,600 resistance and $100,000 support levels, as these thresholds will dictate whether BTC continues its rally or enters a corrective phase.

Featured image from Dall-E, chart from TradingView