Willy Woo Flags Bitcoin Bear Risk as Liquidity Fades Behind Price

Bitcoin faces potential bear market risks as liquidity weakens relative to price momentum. On-chain analyst Willy Woo has flagged concerns that Bitcoin is entering a late-cycle phase, with liquidity flows declining since early 2025. He attributes this to internal capital flow models suggesting that inflows bottomed in late December 2025 and have since strengthened.

Analysts highlight conflicting short-term bullish signals and long-term bearish indicators. While Woo is bullish on Bitcoin for late January and February due to improving investor flows and derivatives participation, he remains bearish for 2026. The key price level to watch is the $98,000–$100,000 zone, which needs to be contested before assessing the next phase of price action.

On-chain metrics and institutional ETF flows reveal market structure shifts. Bitcoin ETFs have seen renewed inflows, with BlackRock's IBIT leading with a $287.4 million single-day inflow. This suggests that institutional demand remains a key driver in early 2026. However, on-chain data indicates that large Bitcoin holders are reducing their holdings, suggesting caution among major investors.

Why Did This Happen?

Bitcoin's recent price action reflects a tug-of-war between short-term inflows and longer-term liquidity concerns. According to CryptoQuant, whale activity has been subdued, with balances held by large investors declining. This suggests that many major players are not buying the dip, signaling hesitation about potential further price corrections.

The ETF wave has also brought a new dynamic to Bitcoin's price structure. In early 2026, spot Bitcoin ETFs have seen a resurgence in inflows, with $458–471 million in weekly net inflows. This supports the idea that Bitcoin is being treated as a strategic asset rather than just a speculative play.

How Did Markets React?

Bitcoin's price has moved between $87,000 and $93,000 in recent weeks, with $90,000 serving as a critical support level. Analysts warn that a break below this level could open the door to a decline toward $69,230. The 50-week simple moving average is another key technical indicator, with Bitcoin trading below it for nine consecutive weeks— a pattern that historically precedes sharp corrections.

The ETF inflows have also pushed Bitcoin above prior trading ranges. A breakout from a symmetrical consolidation pattern was confirmed in early January, indicating short-term upside potential. However, the asset remains about 26–27% below its October 2025 peak.

What Are Analysts Watching Next?

Analysts are closely monitoring Bitcoin's ability to sustain its current price levels. Willy Woo has identified a "hot zone" where momentum lacks sufficient liquidity support. He warns that without a massive influx of spot liquidity, the bearish 2026 outlook remains intact.

On-chain indicators are also being scrutinized. The 30-day change in Bitcoin's realized capitalization turned negative in late December, signaling a shift in organic investor conviction. This, combined with ETF-driven inflows, suggests a market being propped up externally while internal conviction wanes.

Market participants are also watching the broader macroeconomic landscape. The Trump administration's 10% credit card interest rate cap and geopolitical developments such as the capture of Venezuelan President Nicolás Maduro are seen as potential macro catalysts. These factors could either support Bitcoin as a geopolitical hedge or shift risk sentiment away from high-beta assets.

Bitcoin's four-year cycle remains a topic of debate among experts. While Willy Woo defends the traditional cycle as valid until at least 2026, others argue that institutional adoption and macroeconomic forces are reshaping Bitcoin's market behavior. The debate centers on whether the traditional halving-driven cycles are still relevant or if the asset has entered a new phase of more stable, long-term growth.