Bitcoin Risks $70K as Analyst Flags Fed’s $106B Liquidity Alarm

Bitcoin (BTC) is holding near $90,000 after a week of listless trading, unable to build momentum toward six figures.

It has led to analyst Doctor Profit cautioning that the dominant cryptocurrency could still fall to the $70,000 zone, with the crypto strategist pointing to a massive, sudden injection of liquidity by the U.S. Federal Reserve as a critical warning signal for all risk assets.

Market Consolidates as Bearish Targets Loom

The price of Bitcoin is effectively unchanged over the past week, and at the time of writing, it was trading around $90,300. It has moved less than 2% in either direction in the last seven days, trapped between immediate support near $89,300 and resistance just above $94,400, according to recent data.

In a post on X, Doctor Profit laid out a clear bearish case, stating that they have maintained short positions initiated between $115,000 and $125,000 and are now targeting a move down to the $70,000-$75,000 area.

“The next target is BTC at the $70k region, bearish,” the analyst wrote. They noted they would only add to these short positions aggressively if Bitcoin sees an upward move into the $97,000-$107,000 range, viewing that as a final opportunity before a deeper decline.

Other traders are watching key levels, with Titan of Crypto noting that Bitcoin recently bounced at support around the Ichimoku cloud, but warned that losing this structure would raise the odds of revisiting lower price zones. Axel Adler Jr. added that the $79,000 area could become a major stress test for long-term holders if selling pressure increases.

Liquidity Warning and Structural Hurdles Ahead

Beyond chart patterns, macroeconomic factors are adding to investor caution. Doctor Profit specifically highlighted the Federal Reserve’s recent emergency lending operation, which provided over $106 billion in short-term liquidity to banks this week.

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The analyst drew a parallel to similar actions taken in 2008, framing it as a significant red flag for financial stability that could impact speculative assets like Bitcoin.

Meanwhile, in a January 9 market brief, Adler suggested that the current drawdown is rather mild by historical standards, even as sentiment darkens. According to him, Bitcoin’s correction from last year’s high stands near 29%, far shallower than the 70% to 90% dips seen in past bear markets. His analysis placed BTC around two times above its cumulative value days destroyed (CVDD) fair-value model, a zone that has often marked early-stage bear conditions rather than full capitulation.

The community sentiment is also mixed, reflecting the uncertainty. As investor Merlijn The Trader put it in a post, “Price doesn’t lift on belief. It lifts when structure is repaired and liquidity returns.” And with Bitcoin’s structure still in question and macro warnings flashing, the battle for its next major directional move is intensifying.