Bitcoin Dips Near $98K: On-Chain Signals & 2025 Outlook

Market snapshot: a sharp pullback into late 2025

Bitcoin experienced a notable pullback, sliding from intraday highs above $104,000 to levels near $98,000. The move erased recent gains and represents a decisive short-term correction after an extended period of elevated prices. While volatility is normal for digital-asset markets, several on-chain and macro signals are helping explain the strength and scope of this decline.

What the on-chain data is showing

Multiple on-chain indicators point to increased distribution pressure from long-term holders and declining institutional appetite.

Long-term holder selling

Wallets that held coins for extended periods have been winding down positions at elevated rates. This selling has materialized as meaningful transfers to exchanges and lower net supply on longer time horizons, feeding realized gains and elevated liquidity available for sale.

Realized gains and profit-taking

Elevated realized profit metrics indicate a concentrated wave of profit-taking across the market. Large, concentrated sell-offs often follow phases of rapid appreciation, and realized gains provide a practical lens into which portions of supply are moving from unrealized to realized profit.

Institutional demand versus miner supply

Institutional inflows, which helped underpin earlier rallies, have softened in recent weeks. At times, daily institutional buying volumes have fallen beneath miner issuance, creating a structural gap that can amplify downward pressure when combined with retail or holder selling.

Technical reference points traders are watching

Several technical levels have become focal points for market participants:

• Near-term support around the high‑$90,000s, where recent lows clustered.
• The 365‑day moving average, a widely used long-term trend gauge, which has hovered near the low‑to‑mid $100,000 range. Failure to hold this average could invite deeper retracement.
• Estimated production costs for miners, which act as a conceptual downside anchor for many market participants.

Production cost and a historical floor

Rising network difficulty and higher operating inputs have pushed estimated miner production costs higher. For many market observers, this cost of production serves as a de facto historical floor in volatile episodes because miners face diminishing incentives to sell below breakeven for extended periods.

Macro backdrop: liquidity, policy and the 2025 narrative

Macro developments in 2025 have shaped investor behavior across risk assets. Several themes stand out:

• Liquidity dynamics: Periods of fiscal or market stress can temporarily withdraw liquidity from risk markets. When liquidity tightens, crypto markets—being relatively thinner than global equities—can experience outsized moves.
• Equity competition for capital: Growth-oriented equities, especially large-cap technology stocks, have absorbed risk appetite at various points in 2025, which at times has constrained fresh capital flows into crypto.
• ETF flow dynamics: After a strong wave of interest earlier, inflows into spot and related crypto investment products have slowed, reducing a key source of steady demand that supported prices during prior rallies.

Policy interruptions and short-term shocks

Interruptions in government operations or market infrastructure can temporarily affect treasury balances, liquidity management, and investor risk tolerance. Even after a resolution, the lagged effects—back pay, service disruptions, and administrative backlogs—can keep the macro environment uneven for weeks.

Correlation with equities and the “negative skew”

Bitcoin’s relationship with major equity indices remains important. In 2025, observers have pointed to an asymmetric correlation: Bitcoin tends to drop more on negative equity days than it rallies on positive ones. This “negative skew” indicates that, in stressed equity environments, crypto often acts as a higher‑beta exposure—falling faster—while not gaining as much in periods of market optimism.

Why the asymmetry matters

• Liquidity sensitivity: When liquidity evaporates, thinner markets show larger price moves to the downside.
• Risk allocation: Investors rotate capital into assets perceived as safer during risk-on periods, and back out quickly during risk-off episodes.
• Investor fatigue: After sustained rallies, some market participants shift to profit preservation, making downside moves sharper than upside follow‑through.

Implications for traders and investors

This environment calls for heightened attention to position sizing and liquidity management. Practical considerations include:

• Set clear stop-loss and take-profit rules. With asymmetric downside moves possible, disciplined risk controls are essential.
• Watch on-chain flow metrics. Exchange inflows, realized gains, and miner selling rates can signal mounting selling pressure before it fully appears in price.
• Monitor institutional flow data. ETF and custody inflows are a leading indicator of structural demand; declines can foreshadow broader corrections.
• Consider liquidity conditions. Thin order books and lower stablecoin issuance magnify price moves; avoid executing large blocks without liquidity checks.

Outlook into late 2025 and early 2026

Looking ahead, several scenarios are plausible depending on demand reacceleration and macro stability:

• Recovery scenario: Renewed institutional purchases and stronger ETF inflows could absorb excess supply and push prices back toward recent highs.
• Consolidation scenario: If demand remains muted, price may trade sideways in a range while on-chain metrics normalize and realized selling eases.
• Deeper correction: Persistently weak demand combined with renewed macro stress could lead to deeper retracement toward long-term structural support levels.

Market participants should weigh these scenarios against portfolio objectives and risk tolerance. Volatility also creates opportunity: disciplined buying on weakness, staged allocation, and hedging can be prudent approaches for longer-term investors.

Key takeaways for MEXC users

• Price corrections are a natural part of market cycles. Use defined plans rather than emotion-driven decisions.
• On-chain metrics provide actionable signals. Monitor long-term holder selling, exchange inflows, and realized gains for evidence of distribution.
• Macro developments remain influential in 2025. Liquidity shifts, equity market behavior, and policy events can rapidly change market dynamics.
• Risk management is essential. Consider trade size, stop levels, and liquidity when executing positions on MEXC.

Conclusion

The recent dip toward the $98K area highlights the interplay between on-chain distribution, softer institutional demand, and broader market liquidity conditions in 2025. While elevated realized gains and long-term holder selling have driven near-term pressure, longer-term structural supports such as miner economics and potential reacceleration in institutional flows may limit downside. For traders and investors, disciplined risk controls and attention to on-chain and flow data remain the most reliable tools for navigating volatility.

For real-time updates and professional-grade trading tools, MEXC continues to provide a comprehensive platform for users to monitor market conditions and execute strategies responsibly.

Disclaimer: This post is a compilation of publicly available information.
MEXC does not verify or guarantee the accuracy of third-party content.
Readers should conduct their own research before making any investment or participation decisions.