Bitcoin has recently experienced a significant market correction, prompting a shift in investor sentiment from neutral to fear. This downturn, influenced by various factors including ETF outflows and a surprising correlation with Asian stock markets, has put Bitcoin's resilience to the test, yet analysts suggest a potentially healthy consolidation amidst the volatility.
Bitcoin's Recent Correction and Sentiment Shift
After a period of recovery, Bitcoin saw a mid-week correction, pulling its price from $94.7K down to $90K and pushing market sentiment back into "fear" territory. This shift followed a brief positive start to 2026, marked by renewed ETF inflows, which quickly reversed into substantial net outflows totaling $729 million. Despite this downturn, some analysts view the current sentiment as a potential "buy opportunity," provided no major bearish geopolitical events escalate into "extreme fear."
Tracking Asian Stocks and Key Price Levels
An intriguing observation during this period was Bitcoin's correlation with Asian stock markets. Historically, BTC often gained during Asian trading hours, only to sell off during U.S. sessions. However, the recent dip aligned closely with corrections in major Asian indices like the Nikkei and Nifty 50, both easing over 1%. Technically, Bitcoin remains within its December price range of $80K-$94K. Defending the 50-day Moving Average at $89.2K is crucial; a successful hold could trigger a rebound towards $94K-$96K, while a breach risks a fall to $84K or even $80K.
On-Chain Metrics Point to Potential Rebound
On-chain analytics reveal a more optimistic underlying structure. The intense selling pressure and profit-taking observed in late 2025 have significantly eased, with daily average Realized Profit dropping from over $1 billion to $183 million. This reduction in selling, particularly from long-term holders, is seen as a crucial precursor for renewed upside momentum. However, a sustained recovery hinges on short-term holders reclaiming their cost basis of $99.1K. Failure to achieve this could lead to panic selling and extend the current bearish sentiment, making this metric vital for monitoring Bitcoin's trajectory in the coming weeks.
