Bitcoin Retreats to $91,500 as Analysts Debate 'Dead Cat Bounce' vs. Accumulation

Bitcoin’s price dropped from above $94,000 to $91,500 in a matter of hours on Jan. 6, 2026, triggering over $96.5 million in long liquidations. The decline erased more than 2% of the asset’s value and caused the total crypto market capitalization to fall from $3.3 trillion to $3.23 trillion within a few hours. Analysts are now split on whether this represents a temporary bounce or the start of a deeper correction.

Institutional demand, however, has remained strong. Spot Bitcoin ETFs have seen inflows of over $1.1 billion in the first two trading days of 2026, indicating continued accumulation by regulated investors. This trend suggests that the current volatility may not necessarily signal a bearish shift in sentiment.

Price levels and technical indicators are being closely watched for signs of a potential rebound. The $95,000 level is seen as a critical threshold by several analysts, with a break above that price potentially signaling a run toward $100,000. Metrics such as the Spent Output Profit Ratio and coin movement off exchanges suggest steady accumulation rather than panic selling.

Why Did This Happen?

Bitcoin’s sharp correction was fueled by a combination of factors, including leveraged traders being caught off guard and the broader crypto market reacting to the price drop. Coinglass data shows that over $96.5 million in long positions were liquidated in just a few hours, which likely accelerated the sell-off.

Some analysts argue that the initial rally lacked the fundamental support to sustain a true breakout. This has led to the characterization of the move as a “dead cat bounce,” a term used to describe a temporary rise followed by a deeper decline.

What Are Analysts Watching Next?

Despite the volatility, several analysts remain optimistic about Bitcoin’s long-term trajectory. Jonatan Randin of PrimeXBT points out that the current price action is more indicative of accumulation than panic selling. The fact that around 72% of the Bitcoin supply is considered illiquid and held by entities that rarely spend supports the idea that this is not a bearish trend.

Saeed Al Fahim of Tharwa also believes that Bitcoin is behaving like a macro asset again, with the current price near $91,500 suggesting that a return to six figures is still within reach. He notes that the resistance seen in December was likely due to year-end tax harvesting and portfolio rebalancing.

Przemek Kowalczyk of Ramp Network cautions against overreliance on short-term price levels. Instead, he argues that the true test of Bitcoin’s strength lies in the durability of the system. As long as liquidity remains available and settlements proceed smoothly, price tends to follow over time.

How Do Broader Market Trends Fit In?

Bitcoin’s recent price action is also being viewed in the context of a larger “tokenization supercycle” predicted by Bernstein. The firm believes that Bitcoin and the broader digital asset market have likely bottomed and may see a rally toward $150,000 in 2026. This forecast is based on the expansion of stablecoin payments, tokenized real-world assets, and increasing institutional interest.

Bitcoin ETFs recorded $694.7 million in inflows on Jan. 5, 2026, led by BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund. These inflows suggest that institutional investors remain bullish on Bitcoin despite short-term volatility.

Bitcoin’s price has also been influenced by geopolitical developments, particularly a U.S. military operation in Venezuela. This event caused a temporary pullback in price and raised concerns about market stability. Analysts remain cautious about the potential ripple effects of such geopolitical events.

Overall, the market remains in a state of flux as investors and analysts watch for signs of whether this correction will be short-lived or mark the start of a deeper bearish trend. The coming weeks will be critical for Bitcoin’s price action and for understanding whether institutional demand will continue to support it.