Bitcoin dips below $100k as sell-side liquidity dries up

Bitcoin briefly retested the price level above $100,000 on Jan. 6, but the flagship cryptocurrency dipped below the six-digit mark again.

Bitcoin’s (BTC) performance in 2025 has not met expectations so far, although the year is still in its early stages. Despite its inability to hold above $100,000 and a 15% drop from the December all-time high of $108,000, analysts remain optimistic about BTC’s long-term outlook.

Bitfinex Alpha shared its first report for the year with crypto.news, highlighting several positive indicators for Bitcoin.

The report emphasized that Bitcoin’s “sell-side liquidity is drying up.” This is evident in the Liquidity Inventory Ratio metric, which has declined significantly over the past three months.

The liquidity inventory measures how long the current supply can meet demand. Recent data shows this metric has dropped from 41 months in October to under seven months as of early 2025.

“This significant decline aligns with the rallies observed in both Q1 and Q4 of 2024, indicating a tightening of available liquidity during periods of strong market activity,” the Bitfinex analysts wrote in their report.

Bitcoin gained 61% during the last two months of 2024, fueled by U.S. election results that spurred a bull run, lifting altcoins as well. Many of these altcoins have since retraced, and analysts caution that a deeper pullback could occur in Q1 2025. Bitfinex analysts echoed this sentiment.

However, they are convinced miner related metrics are also pointing to a decrease in downside pressure. Bitcoin miner activity, according to latest on-chain data, shows miners’ BTC flows to exchanges falling at a rapid pace. 

While miner selling increased slightly in November 2024, this profit-taking has slowed over the past month as BTC remained near the $100,000 level. Most miners are currently profitable, resulting in a sharp drop in BTC flows to exchanges.

The net unrealized profit and loss for miners stands at a positive 0.5, indicating that miners remain in a strong financial position.