Bitcoin Correction Intensifies: Why Institutional Sellers Are Pressuring the Market

Bitcoin Under Pressure: Institutional Selling Wave Meets Macro Uncertainty

The Bitcoin market is experiencing a phase of intense correction that goes far beyond normal profit-taking. What makes the current situation particularly noteworthy is the interplay of systematic institutional selling with macroeconomic uncertainty. While many observers hoped for quick recoveries, the market structure suggests a longer consolidation process – with possibly even deeper price declines.

Analysis of various on-chain metrics and institutional data streams shows a clear picture: This is not a panic selling wave by retail investors, but a coordinated position reduction by large market participants.

The Facts

Bitcoin recorded a decline of over 22.5 percent within one week to $69,000 ^[1], wiping out all gains from the past 15 months. At the time of reporting, BTC was trading at $69,556, slipping below the psychologically important $70,000 mark ^[2].

Veteran trader Peter Brandt identifies signs of "Campaign Selling" in the current market movement – a systematic, coordinated selling action by large institutions ^[1]. This assessment is supported by on-chain data: The metric for net position changes by miners shows a clear shift toward net distribution in January, with miners consistently bringing more BTC to market ^[1].

U.S. spot Bitcoin ETFs also significantly reduced their exposure. Net BTC holdings fell to 1.27 million BTC by Wednesday, down from 1.29 million at the beginning of the year ^[1]. The Coinbase premium, an important indicator of institutional interest, fell to yearly lows ^[1].

The market movement is not occurring in a vacuum: The S&P 500 Software and Services Index lost approximately $830 billion in market value since January 28, recording six consecutive days of losses ^[2]. Ryan Kirkley, Co-Founder and CEO of Global Settlement, commented to BTC-ECHO that the selection of Kevin Warsh as successor to Fed Chair Jerome Powell was also negatively received by markets ^[2].

Gadi Chait, Head of Investments at Xapo Bank, advises increased caution: "The price movement shows a phase of elevated volatility. Bitcoin moved quickly above $70,000 and seems to be finding support there. Given the global uncertainties, a wait-and-see approach makes sense at present" ^[2].

Brandt projects a potential price target of around $63,800 based on his technical analysis, which would represent a further decline of 10 percent ^[1]. On-chain analyst GugaOnChain even sees risks for a deeper drop toward $54,600. This value corresponds to the lower zone of the BTC DCA Signal Cycle indicator, which would identify Bitcoin as structurally undervalued ^[1]. GugaOnChain explained: "The current price convergence toward the band that signals the beginning of the accumulation phase and sits at about $54,600 suggests that we are in the critical transition between capitulation and accumulation" ^[1].

Analysis & Assessment

The current correction differs in important aspects from typical bull market pullbacks. The absence of even moderate recovery rallies and the lack of "dip buyers" suggests a fundamental shift in market sentiment. The combination of systematic selling by miners, ETF outflows, and weak institutional interest forms a perfect storm.

Particularly noteworthy is the parallel weakness in the tech sector. The crypto market once again demonstrates its high correlation with risk assets, but reacts faster and more violently. As crypto forensics expert Albert Quehenberger from AQ Forensics aptly analyzes: The 24/7 trading, blockchain transparency, and lower market depth lead to stronger swings, but also enable faster price discovery ^[3].

The warning from Malte Häusler of Timeless Investments about a possible AI bubble and further corrections in tech companies ^[3] suggests that the macroeconomic pressures are not yet fully priced in. Should a broader tech correction occur, Bitcoin as a highly volatile asset would likely be disproportionately affected.

Historically, however, similar phases of institutional distribution have also created attractive entry opportunities. The reference to 2022, when Bitcoin fell below the $20,000 mark before a rally to over $30,000 followed a year later ^[1], shows the long-term recovery potential. Dr. André Dragosch from Bitwise expects further consolidation in the first quarter, but assumes that "the bottom is most likely already behind us" ^[3].

The structural thesis remains intact: Bitcoin is increasingly viewed as a treasury asset by companies and is gaining importance as collateral for loans ^[3]. These fundamental developments are not called into question by short-term market movements, but merely delayed temporally.

Conclusion

• The current Bitcoin correction is primarily driven by systematic institutional selling, not retail panic – this is clearly shown by declining ETF holdings and increased miner distribution

• Further price declines to $63,800 (technical analysis) or even $54,600 (on-chain metrics) are realistic and would activate historical accumulation zones

• Dependence on macroeconomic factors and tech sector performance remains high – a possible AI bubble correction could create additional pressure

• Despite short-term weakness, structural fundamentals remain intact: The increasing use as a treasury asset and loan collateral supports the long-term thesis

• Patience is the watchword: Experts expect consolidation in the first quarter of 2026 and do not yet see the actual catalyst for a sustainable recovery – however, a possible rotation out of precious metals could bring new momentum