Bitcoin crash, today's market faces a serious situation as it approaches the $112,000 resistance line

After shifting from the bullish market of Fall 2025, today’s Bitcoin market faces a significant test. As selling pressure increases, Bitcoin’s current price has reached a key resistance level, deepening the divide between bullish and bearish market participants. Data today reveals that Bitcoin is approaching a critical turning point.

Implications of the Rapid Rise in Bitcoin and the Risk of a Crash

Gold, which previously hit an all-time high near $4,380, has plummeted, and the Bitcoin market is also experiencing turbulence. Technical indicators, market sentiment, and institutional investors’ positioning all suggest that the market is in an overextended state.

Even among major Wall Street institutions, opinions are divided. JPMorgan Chase and HSBC warn that if the Federal Reserve raises its terminal interest rate outlook, the crypto market, including Bitcoin, could face a tough period. Conversely, renowned investor Ray Dalio holds a small amount of Bitcoin as a long-term diversified asset and recognizes its value as a hedge against fiat currency.

Discussions around AI are also influencing market psychology. Goldman Sachs views massive investments in AI infrastructure as sustainable and capable of significantly boosting labor productivity, while Chao Wang, co-founder of the Alliance, warns of severe negative impacts on the crypto market if an AI bubble bursts.

Market Sentiment Deteriorates as Today’s Trading Data Reveals

As of January 21, Bitcoin’s price has fallen to $89,330 (a 12.60% decline since the start of the year, with a 24-hour trading volume of $125 million). This marks a notable drop from the fall high of $111,125 in Fall 2025. Market sentiment continues to worsen, with the Fear & Greed Index dropping to a “Panic” level of 29.

Last week, Bitcoin spot ETFs recorded net outflows of $1.23 billion, the second-highest level ever. This accelerated capital outflow clearly indicates growing caution among institutional investors. Market share has shrunk to 59.61% for Bitcoin and 12.48% for Ethereum, suggesting a decline in overall market dominance.

The 24-hour long-short ratio stands at 49.3% long versus 50.7% short, with shorts maintaining an advantage. Data from the past 24 hours shows 122,150 liquidations worldwide, totaling $590 million. Of this, Bitcoin liquidations amounted to $177 million, highlighting high market volatility.

Bitcoin’s Critical Level: The Battle Around $110,000

Vincent Liu, Chief Investment Officer at Chronos Research, points out that Bitcoin’s main support level is around $107,000, with resistance at $110,000. Bitcoin has been testing resistance between $111,700 and $115,500, and breaking through this level will be key to determining the market’s direction.

A significant breakout above $111,000 could trigger short covering and further accelerate upward momentum. However, geopolitical tensions between the US and China are weighing on investor confidence, and short-term risks remain high.

Crypto influencer Anthem states that unless Bitcoin surpasses $112,000, he will reconsider his bullish outlook, indicating that this level acts as a psychological defense line.

Meanwhile, analyst Crypto Tony predicts that Bitcoin could fall below $100,000 and find a bottom in the range of $91,000 to $95,000, suggesting a potential crash scenario.

Institutional and “Whale” Strategies—Crash or Rebound?

Despite worsening market sentiment, large investors’ actions are complex. An address associated with Andreessen Horowitz has a short position of $31.14 million in Bitcoin and $46.86 million in Ethereum, with liquidation prices at $115,000 and $4,073 respectively.

Meanwhile, mysterious whales are increasing their long positions to $250 million, including 1,610.93 BTC. Another whale, who accurately shorted the market before the October 11 flash crash, has newly taken a short position worth about $75.93 million at $109,133.1.

These conflicting positions suggest that even among major players, opinions on Bitcoin’s future are divided.

Analyst Charles Edwards believes that if Bitcoin breaks through $120,000, it could quickly rise to $150,000. Technical indicators show that the Bitcoin-to-gold price ratio has reached its lowest point historically, hinting at the possibility of a new bullish trend.

Although the Fear & Greed Index has fallen to “Extreme Fear,” the daily RSI has hit its lowest since April, potentially offering contrarian trading opportunities.

Ethereum’s Challenges and Concerns in the Altcoin Market Today

Ethereum’s current price is $2,960 (a 9.66% decline since the start of the year, with a 24-hour trading volume of $707 million). Tom Lee’s Ethereum asset management firm, BitMine, holds 379,271 ETH (worth about $1.5 billion) since the crash on October 11, 2025.

Technical analysis indicates that Ethereum’s support levels are near the 200-day exponential moving average (EMA) and around $3,500. Prominent technical analyst John Bollinger suggests that the chart may be forming a bullish “W bottom” reversal pattern.

If the rebound momentum continues, Ethereum could break through the $4,450–$4,500 range, with trader Luca even eyeing a new all-time high of $5,200. However, if the price falls below the $3,550 support level, further correction to $3,000–$3,200 could occur.

On-chain MVRV data supports the view that Ethereum is entering a new upward cycle, but the current market remains cautious about whether it can break through the strong support zone of $3,800–$3,900 and the key resistance at $4,100.

Lessons from Market Volatility and Future Outlook

Crypto influencer Yuzhong Kuangshui believes that the crypto market will see “adoption” as the main trend over the next 3–5 years, with stablecoins likely at the core. He notes that savings activities are popular due to low risk and high returns, while speculation on stablecoin infrastructure tokens carries high risk.

Founder of Wintermute points out that the October 11, 2025 crash was triggered by specific news and amplified by high leverage and flawed trading mechanisms. Going forward, liquidity is expected to concentrate on mainstream assets like Bitcoin, Ethereum, and Solana, while altcoins and meme coins may see short-term declines.

Joshua Deuk, head of trading at Mozaik Capital, also notes that market confidence is waning, and the market may enter a short-term high-volatility accumulation phase.

Overall, if Bitcoin can break through the $110,000 level, it could enter a new upward trend. However, if market sentiment worsens further or selling pressure increases, a crash cannot be ruled out. The recent market movements are likely to be a major turning point in the coming weeks.