Price drops aren’t always a reset, and recent market developments prove that.
For starters, the “New Year Rally” kicked off with nearly $200 billion in inflows, which triggered a short liquidity surge, wiping out about $500 million.
Notably, this surge reached levels we hadn’t seen just before the pre-October crash.
Bitcoin (BTC), although not leading the rally, still raked in nearly $100 billion and even flirted with $95,000. Normally, news such as MSCI removing MSTR uncertainty and the launch of the BTC ETF would have pushed it higher.
Source: TradingView (BTC/USDT)
Instead, Bitcoin ended the day down 2%, rallying back to around $90,000.
What betrayed him? Timing. The market was quick to point to the launch of Morgan Stanley’s BTC ETF and the MSCI authorization as more than just a coincidence. Instead, another round of “manipulation” chatter broke out.
To put this into context, BTC’s Q4 crash was triggered by the potential exclusion of MSTR from MSCI. Today, recent developments in ETFs and MSCI have aligned perfectly, giving institutions a clear buying dip.
However, things did not turn out that way.
Instead, Bitcoin retreated, ETFs bled, long positions were liquidated, and sentiment returned toward “fear.” According to AMBCrypto, this breakdown shows exactly why BTC’s return to $90,000 might not just be a “healthy” reset.
Bitcoin declines despite two institutional catalysts
The timing of Morgan Stanley’s Bitcoin move couldn’t have been better.
On the macro side, the FUD was finally starting to fade. Technically, the New Year’s momentum quickly translated into concrete action, as BTC ETFs brought in over $1 billion in the first two trading days of this year.
However, the rally did not last. The momentum quickly met resistance and BTC ETFs saw outflows of $486 million on January 7, just as news of the Bitcoin ETF filing and MSCI MSTR clearing was circulating.
Source: Coinglass
In this context, the decline in Bitcoin does not appear to be a real reset.
Rather, it reflects continued market caution. The Coinbase Premium Index (CPI) returned to negative territory at -0.07 at press time. This indicates weaker domestic demand despite seemingly bullish catalysts.
In short, the market reaction suggests a growing sensitivity to the manipulation narrative.
From a technical perspective, this supports AMBCrypto’s view: the FUD is not over and BTC’s pullback looks less like a buy on the dip and more like an unwinding of sentiment, keeping the risk of a deeper correction on the table.
Final Thoughts
- Despite the ETF news and clarity from MSCI, Bitcoin failed to hold on to its gains, fell back to $90,000, and saw outflows, selloffs, and ETF sentiment slide toward fear.
- With CPI turning negative and traders repositioning, the move looks less like buying the dip and more like persistent FUD.
