Bitcoin (BTC) Alert: CryptoQuant Flags $92K Drop Risk as Demand Cools—Time to Panic or Buy the Dip?

Bitcoin's bull run hits a snag as on-chain analytics firm CryptoQuant sounds the alarm—weakening demand could send BTC tumbling toward $92,000. Here's why traders are watching liquidity flows like hawks.

The Demand Drought

Exchange reserves are creeping up while whale accumulation slows—a classic recipe for downside volatility. Retail FOMO alone can't prop up valuations forever (though Wall Street still hasn't learned that lesson).

Liquidity Crunch Ahead?

With leveraged longs still dominant, any sustained drop below six figures might trigger cascading liquidations. The $92K support level now looms large as the make-or-break zone.

Remember: In crypto, 'healthy corrections' only exist until your portfolio turns red. Whether this is a buying opportunity or the start of something uglier depends entirely on your risk appetite—and how much you trust 'institutional adoption' narratives this week.

TLDR

• Bitcoin demand has dropped to 118,000 BTC over 30 days, down from 228,000 BTC in late May
• Whales and ETFs have cut Bitcoin purchases by over 50% while short-term holders shed 800,000 BTC
• CryptoQuant warns BTC could fall to $92,000 if demand continues deteriorating
• Current price around $104,700 represents a 6.5% decline from May peak of $111,814
• Analysts remain divided on whether low volatility signals strength or potential instability

Bitcoin faces mounting pressure as on-chain data reveals weakening demand across key investor groups. The world’s largest cryptocurrency trades around $104,700, down from its May high near $112,000.

CryptoQuant research shows apparent demand growth has fallen to 118,000 BTC over the past 30 days. This represents nearly half the 228,000 BTC growth observed in late May when Bitcoin approached all-time highs.

The decline spans multiple investor categories. Whales and U.S.-listed exchange-traded funds have reduced their bitcoin purchases by more than 50%. Short-term holders have sold 800,000 BTC since May 27, indicating reduced participation from newer investors.

Futures Market Shows Tactical Shift

Bitcoin’s failure to maintain levels above $110,000 triggered changes in futures markets. Traders began locking in profits and opening new short positions as the price declined toward $105,000.

CryptoQuant’s Traders’ Behavior Dominance metric shows rising short interest as Bitcoin fell. This tactical shift reflects reduced confidence in immediate upward momentum.

The current realized profits remain below $1 billion, which analysts consider relatively small. This suggests the market has not yet reached a typical peak selling phase.

Technical Analysis Points to Key Levels

Bitcoin currently trades below the 20-day Bollinger Band midline at $105,854. The cryptocurrency faces resistance around the $108,000 zone while the Bollinger Bands narrow, indicating decreased volatility.

The relative strength index sits at 47.75, showing neutral momentum. Bitcoin has fluctuated between $103,645 and $108,771 over the past week.

CryptoQuant identifies $101,000 as the next support level if demand continues weakening. Below that, the $92,000 level represents a major support zone based on the Traders’ On-chain Realized Price.

A breakout above $108,000 on high volume could target the previous high of $111,814. However, a decline below $101,000 might signal the start of deeper retracements.

Different analysis firms reach varying conclusions about current market conditions. While CryptoQuant warns of potential drops to $92,000 or even $81,000, Glassnode views the quiet blockchain activity as network evolution rather than weakness.

Glassnode notes that on-chain settlement volume remains high but concentrates in large-value transfers. This suggests institutional usage rather than retail weakness drives current patterns.

The derivatives market now exceeds spot trading by 7 to 16 times, indicating a more sophisticated market structure. Trading firm Flowdesk describes the market as “coiled” rather than breaking down.

ETF flows have dropped more than 60% since April, contributing to reduced institutional demand. Retail participation has also declined while institutional players increasingly shape market flows.

CryptoQuant’s demand momentum indicator reads negative 2 million BTC, the lowest in their dataset. This metric tracks directional buying strength across key investor groups.

Polymarket bettors show uncertainty with nearly equal odds for Bitcoin dropping to $90,000 or rising to $115,000-$120,000 in June. The market appears positioned for movement in either direction.

The tug-of-war between institutional activity and declining retail demand creates conditions for potential dramatic price movements. Current low volatility may represent calm before directional breakouts.

Bitcoin remains nearly flat for the day despite broader market tensions, with only a 2% decline over the past week according to market data.