You wake up, check your phone, and there it is. Again. That familiar red candle staring back at you like a bad grade on a midterm. If you’ve been watching the charts lately, you know the feeling of seeing Bitcoin slide from the mid-$90,000s back toward the $90,000 support level, or even lower. It’s frustrating. It feels like every time we get close to that magical six-figure $100,000 mark, the floor just vanishes.
Why is this happening? Honestly, if you ask three different "experts," you’ll get five different answers. Some point at the Federal Reserve. Others blame "whales" dumping their bags. But if you really want to understand why are bitcoins going down, you have to look past the panic tweets and see the actual machinery moving under the hood.
The market isn't just "crashing" for no reason. It’s breathing. Sometimes it breathes in a way that feels like it's choking, but there are very specific catalysts—from the "Erdoganisation" of the Fed to massive ETF outflows—that explain this recent gravity.
The Liquidity Trap: Why the Fed is Killing the Vibe
Everything in crypto eventually comes back to liquidity. Arthur Hayes, the co-founder of BitMEX, recently argued that Bitcoin is basically a high-octane gauge for dollar liquidity. When there’s plenty of cash sloshing around the system, Bitcoin flies. When that cash gets sucked out, or even when the expectation of new cash stalls, the price dips.
Right now, we're seeing a weird standoff between President Trump and Fed Chair Jerome Powell. Trump wants aggressive rate cuts. He’s been vocal about it, even pressuring the Fed through the Department of Justice, according to some reports this January. But the market hates uncertainty. When investors aren't sure if the Fed will stay independent or if we’ll see a Turkey-style "Erdoganisation" of our monetary policy, they de-risk. They sell.
It's not just politics, though. The latest CPI data showed headline inflation at 2.7%. That’s not "sky is falling" territory, but it’s enough to make the Fed hesitate on those deep rate cuts everyone was banking on for early 2026. If the Fed stays "higher for longer," the "why are bitcoins going down" question answers itself: the cost of holding a non-yielding asset like Bitcoin stays high compared to a boring, safe Treasury bond.
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The ETF Exit: When Big Money Takes a Breather
Remember when the Spot ETFs launched and everyone thought it was a one-way ticket to the moon? Well, those same institutional rails now work in reverse.
In early January 2026, we saw a massive shift in sentiment. After a holiday pump that nearly touched $98,000, institutional investors decided they’d made enough. Data from SoSoValue showed net outflows of nearly $486 million in a single Wednesday. When the "Smart Money" hits the sell button to lock in gains for their Q1 reports, it creates a massive vacuum.
Passive funds and ETFs are great for growth, but they also create a "liquidity vacuum" when they all decide to leave at the same time. It’s basically a crowded theater with a very small exit door.
The Miner Dilemma
Miners are also feeling the squeeze. We are well into the post-2024 halving era now. Block rewards are slim. When the price of Bitcoin stalls, miners often have to sell their holdings just to keep the lights on and pay for their massive electricity bills. It's a forced sell pressure that doesn't care about your "HODL" memes.
The "Bear Market Rally" Reality Check
CryptoQuant dropped a bit of a bombshell recently, suggesting that this entire recent bounce might just be a "bear market rally."
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Basically, they’re saying that while the price went up briefly, the underlying demand is actually shrinking. On-chain data shows that spot demand—regular people buying and holding—is contracting. If people aren't actually using the network or buying coins to keep, the price increases are just "paper gains" driven by leverage and traders.
We saw Bitcoin break below its 365-day moving average. For technical analysts, that's a massive red flag. It’s the "line in the sand" between a bull market and a bear market. Once we slipped below that, the momentum flipped. Now, every small rally is being met by people who are just happy to "get out even," which keeps the price suppressed.
Regulatory Teases: The CLARITY Act Drama
Washington is also playing with our emotions. The Digital Asset Market Clarity Act (the CLARITY Act) was supposed to be the "Big One." It was going to finally draw a line between the SEC and the CFTC and give us a real framework.
But then, the Senate Banking Committee delayed the markup. Why? Squabbles over stablecoin yields and how banks can handle digital assets.
Every time a pro-crypto bill gets delayed, a little bit of the "bullish" oxygen leaves the room. Investors who bought in expecting a regulatory "green light" start to get cold feet. They see the delay, they see the price stagnation, and they decide to rotate their money into tech stocks like AMD or Nvidia, which are currently riding the AI wave.
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The Psychology of the $100,000 Wall
Let's be real: $100,000 is a scary number.
Humans like round numbers. We also fear them. As Bitcoin approached $98,000 earlier this month, the "sell" orders were stacked high. It’s a psychological resistance level that requires an immense amount of capital to break through. When we failed to hit it, the disappointment led to a "flush."
Think of it like a runner sprinting toward a finish line, only to trip three feet away. The crowd groans, and the runner takes a minute to get back up. That’s Bitcoin right now. It’s catching its breath after a failed sprint.
What Should You Actually Do?
If you're staring at your portfolio wondering if you should panic, take a breath. Understanding why are bitcoins going down is the first step toward making a rational move rather than an emotional one.
Here are the actionable takeaways for the current 2026 market:
- Watch the 50-day EMA: Currently, support sits around $91,600. If we hold that, the "uptrend" narrative is still alive. If we close daily candles below that, $85,000 is the next stop.
- Monitor ETF Flows: Watch the daily SoSoValue or Bloomberg ETF data. If the outflows turn back into steady inflows, it’s a sign that the "big boys" think the bottom is in.
- Ignore the "To the Moon" Noise: Analysts like Cathie Wood are still bullish for the long term, but in the short term, the macro environment (inflation and Fed politics) is the boss.
- Dollar Cost Average (DCA) is still king: Trying to time the exact bottom of a "liquidity flush" is a fool's errand. If you believe in the long-term thesis, small, consistent buys are safer than "going all-in" on a dip that might dip further.
The market is currently in a "show me" phase. It needs to see real regulatory progress or a clear signal from the Fed before it takes another run at the highs. Until then, expect the chop. It's not the end of the world; it's just crypto being crypto.
To get a better handle on your next move, track the "Fear and Greed Index"—when it hits "Extreme Fear," that's historically been a better time to look for entries than when everyone is screaming about $200,000. Keep your position sizes manageable so you can actually sleep at night while the charts do their thing.