Bitcoin price dips as shutdown odds hit 67% – Is a local top ahead?

During times of volatility, traders place round “liquidity” as a option to gauge the combination stream of capital throughout threat property. Elevated liquidity alerts sturdy participation and the next threat urge for food out there.

Naturally, retaining an in depth watch on stablecoin flows is essential over the approaching weeks, as the percentages of a authorities shutdown have moved above 67%, with merchants pricing in a possible shutdown starting on the 14th of February.

Technically, the timing couldn’t be worse. After a 1.88% intraday drop, Bitcoin [BTC] has slipped beneath $70k, failing to carry the extent as assist, whereas CryptoQuant information reveals new capital inflows turning damaging.

Supply: CryptoQuant

Taken collectively, “regardless of” BTC’s 30%+ drop from its mid-January $97k peak, fresh capital still isn’t stepping in. In different phrases, new traders nonetheless aren’t seeing a compelling threat–reward in Bitcoin at present ranges.

Notably, this hesitation additionally aligns with how the market reacted through the earlier shutdown cycle, when over $200 billion in liquidity was drained, BTC and ETH fell 20–25%, and altcoins had been hit considerably tougher.

During times of maximum worry and uncertainty, capital usually shifts into stablecoins, that are seen as safer property. This transfer is often interpreted by the broader market as a optimistic sign for Bitcoin’s restoration as soon as confidence returns.

But USDT metrics have turned bearish amid growing shutdown fears. Naturally, the query arises: Is that this a coincidence, or is capital intentionally transferring out, bringing the Bitcoin “market-top” narrative again into focus?

USDT flows trace at tightening liquidity round Bitcoin

Tightening liquidity is a direct reflection of fading threat urge for food.

Notably, given the place the market currently stands, this warning begins to make sense, from FUD across the new Fed nominee, stablecoin invoice chaos, to China trimming U.S. Treasuries and ongoing tariff uncertainty.

In opposition to this already FUD-heavy backdrop, latest shutdown fears are solely including stress on Bitcoin traders. On this context, USDT’s market cap turning damaging factors to liquidity, leaving the system moderately than positioning for an instantaneous risk-on transfer.

Supply: CryptoQuant

Put merely, macro “worry” is outweighing dip-buying “greed,” suggesting traders nonetheless don’t view the present construction as a market backside. The absence of recent inflows reinforces the concept confidence stays fragile.

Quite the opposite, tightening liquidity round Bitcoin alongside rising shutdown fears resembles the form of setup that varieties native or cyclical tops, the place buying pressure is not strong enough to soak up the FUD.

Briefly, till liquidity stabilizes and capital meaningfully returns, BTC faces draw back threat moderately than a clear reversal. In that context, the $70k degree reinforces the thought of a neighborhood prime moderately than a sturdy assist zone.

Last Ideas

• Regardless of Bitcoin’s 30%+ drop, weak USDT flows and damaging inflows sign fading threat urge for food moderately than recent capital stepping in.
• Macro worry, shutdown uncertainty, and fragile confidence hold Bitcoin uncovered to additional draw back as an alternative of a clear bullish reversal.