Global economic jitters recently sent shockwaves through the cryptocurrency market, triggering a significant dip in Bitcoin's value. This recent downturn has been exacerbated by a confluence of macroeconomic factors and increasingly bearish technical and on-chain indicators.

Macroeconomic Headwinds Fuel Bitcoin's Decline

On January 25, Bitcoin plunged below $87k following U.S. President Donald Trump's threats of a 100% tariff on Canada and an anticipated U.S. government shutdown. This macroeconomic uncertainty immediately translated into market panic. Leading to a massive cascade of liquidations totaling $677.1 million across the crypto market. With long positions bearing the brunt, accounting for $606.2 million of the losses.

Bearish Signals Emerge from Derivatives and On-Chain Data

Analysis of the derivatives market highlighted a concerning trend. Bitcoin's Open Interest has been steadily falling since November. Indicating a lack of support for a new upward trend, despite a brief bounce in early January. Furthermore, the Taker Buy/Sell Ratio, a key measure of market aggression, has consistently remained below 1. Confirming that bears are currently dominating market orders and driving prices lower. On-chain metrics further corroborated this bearish sentiment. The Net UTXO Supply Ratio recently plummeted into an "elevated risk zone," degrading significantly within a week. This suggests an an "accelerated deterioration mode" for Bitcoin's health. Experts warn that without a clear appearance of real demand, the cryptocurrency faces a high probability of continued weakness and further price lows. The prevailing market sentiment remains fearful, advising traders to exercise caution.