Bitcoin's Critical $94K–$96K Support Zone: A Strategic Buying Opportunity or Precursor to Deeper Correction?

Bitcoin's price has recently retreated to the $94K–$96K range, a pivotal support zone that has drawn intense scrutiny from traders and analysts amid a late-stage bear market. This correction follows a 25% decline from its October peak of $126,000, driven by macroeconomic pressures, liquidity constraints, and forced liquidations. The question now is whether this zone represents a strategic entry point for long-term investors or a warning sign of further downward momentum. To answer this, we must dissect technical and on-chain divergence patterns, contextualized within historical bear market cycles.

Technical Divergence: RSI, MACD, and the $94K–$96K Zone

Bitcoin's recent price action has triggered mixed signals from key technical indicators. The Relative Strength Index (RSI) has entered oversold territory, a classic bear market characteristic, yet the asset continues to depreciate, hinting at bearish divergence. Similarly, the Moving Average Convergence Divergence (MACD) histogram has shown weakening bullish momentum as the price tests the $94K–$96K range. This divergence-where momentum indicators fail to confirm price stability-suggests lingering bearish sentiment, even as some analysts argue the zone could act as a psychological floor.

Historically, such divergence has preceded both reversals and deeper corrections. For instance, during the 2018–2019 bear market, Bitcoin's RSI and MACD similarly signaled exhaustion near $3,500 before a prolonged rebound. However, the current context differs: liquidity-driven sell-offs, rather than systemic failures, dominate the narrative. A weekly close below the 50-week moving average (~$103,000) would likely confirm a deeper bearish phase according to technical analysis.

On-Chain Divergence: NVT, MVRV, and Liquidity Signals

On-chain metrics provide further nuance. The Network Value to Transactions (NVT) ratio has declined to levels observed during the 2019–2022 bear markets, signaling reduced speculative activity and potential structural shifts. Meanwhile, the Market Value to Realized Value (MVRV) ratio has dropped to approximately 1.8, a level historically associated with market bottoms. This suggests Bitcoin may be approaching a point where long-term holders begin accumulating at discounted prices.

However, recent outflows from U.S. spot Bitcoin ETFs-exceeding $1.1 billion in a single week-have exacerbated downward pressure. These outflows, coupled with a 27% decline in assets under management in digital asset ETPs since October, underscore fragile liquidity conditions. Analysts caution that while NVT and MVRV divergence may hint at undervaluation, the persistence of outflows could delay a reversal.

Historical Precedents and Market Outlook

Comparisons to past bear markets reveal both caution and optimism. In late 2022, Bitcoin's MVRV and NVT ratios mirrored current levels before a 12-month rebound. Yet, the 2025 sell-off lacks the credit contagion seen in 2022, making it harder to pinpoint a catalyst for a rapid recovery. The U.S. government shutdown and fading hopes for a Federal Reserve rate cut have further tightened liquidity, though analysts expect these factors to reverse as fiscal operations normalize.

The Fear & Greed Index, currently at an extreme fear level of 10, and $619 million in crypto liquidations over 24 hours according to market data, highlight market fragility. However, Bitcoin's role as a hedge against monetary expansion-cited by experts like Hunter Horsley of Bitwise-remains a bullish argument according to market analysis.

Strategic Implications for Investors

For strategic investors, the $94K–$96K zone presents a high-risk, high-reward scenario. While on-chain metrics suggest undervaluation, technical divergence and liquidity outflows indicate caution. A stabilization at this level could validate it as a macro demand zone, but a break below $94K would likely trigger further selling. Positioning here requires a long-term perspective, as Bitcoin's historical resilience in late-stage bear markets often precedes multi-year bull cycles.

Conclusion

Bitcoin's $94K–$96K support zone is a critical inflection point, reflecting both the fragility of current liquidity conditions and the potential for a structural shift. While technical and on-chain divergence signals caution, historical precedents suggest this zone could mark the end of the current correction. Investors must weigh short-term risks against Bitcoin's long-term narrative as a store of value. As always, vigilance in monitoring liquidity trends and macroeconomic catalysts will be key to navigating this pivotal phase.