Bitcoin is trading at a pivotal level after losing momentum from the $120,000 zone and slipping into deeper volatility. The price is now testing the $112,000 support level, a key zone for bulls to defend in order to avoid further bearish pressure. While the broader trend remains constructive in the long term, the short-term outlook has tilted toward weakness, with momentum indicators showing a leaning toward the downside.

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Analysts highlight this moment as a potential inflection point for the market. A strong defense of current levels could reset sentiment and allow Bitcoin to consolidate before another breakout attempt. However, failure to hold above $112K may trigger a sharper correction, opening the path toward deeper support levels.

Adding to the cautious tone, CryptoQuant’s head of research, Julio Moreno, shared new data showing that the CryptoQuant Bull Score Index has shifted into a neutral signal. This shift highlights that while selling pressure hasn’t fully taken over, the market is no longer in clear bullish territory. The coming days will be decisive in determining Bitcoin’s short-term trajectory.

Bitcoin Indicator Signals Caution

According to CryptoQuant’s head of research, Julio Moreno, Bitcoin’s Bull Score Index has shifted from a “Bullish Cooldown” phase to a “Neutral” phase. The index, which tracks overall market strength using a combination of trading flows, investor behavior, and derivatives data, declined from 70 to 50. This move signals that bullish momentum has weakened, leaving Bitcoin in a more balanced state between buyers and sellers.

Moreno noted that “for risk management purposes, further softening in the index indicates price could go lower.” This means that while the neutral zone doesn’t yet imply a confirmed downtrend, any additional deterioration could increase the probability of deeper corrections. Traders are therefore closely watching upcoming sessions, as price action around the $112K–$115K support zone will be critical in shaping short-term direction.

The broader context remains constructive. Bitcoin has been in a steady uptrend since 2023, a cycle that has already delivered massive gains and propelled the asset to new all-time highs above $124K earlier this month. Many analysts argue that the market is now in the final phase of this bull run, where volatility typically rises and investor sentiment becomes divided between expectations of continuation and warnings of exhaustion.

As the month comes to an end, global macroeconomic factors—including interest rate policies, institutional inflows, and liquidity conditions—will play a decisive role. If Bitcoin holds its support and fundamentals remain strong, this neutral phase may simply represent a healthy pause before the next upward move. Conversely, if weakness persists, the market could be signaling the start of a deeper consolidation phase.

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Price Action: Testing critical Support Level

Bitcoin is currently trading around $112,837, after a sharp decline from its all-time high near $123,217. The daily chart shows that BTC has slipped below the 50-day SMA ($116,158) and is now testing the 100-day SMA ($111,224) as support. This level has become a crucial line of defense for bulls.

The rejection from the $123K region highlights strong resistance overhead, which has led to several failed breakout attempts. The structure suggests that BTC has entered a consolidation phase, with the $111K–$116K zone serving as the immediate range. A decisive breakdown below $111K could open the way toward the 200-day SMA ($100,597), a level many analysts see as the final support for this cycle’s uptrend.

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Momentum indicators also align with weakening bullish pressure, as recent candles show lower highs and lower lows. However, holding above the 100-day moving average would strengthen the bull case, potentially setting up a rebound toward $118K and eventually retesting $123K.

Featured image from Dall-E, chart from TradingView

The percentage of Ethereum (ETH) supply staked on the network has dropped to 27.6%, a level last seen in July 2024. This decline has raised questions about Ethereum’s long-term appeal among investors and whether staking remains a preferred option.

Staked Ethereum Percentage Drops From November Peak

According to data from Dune Analytics, the proportion of ETH staked on the network has declined to 27.6%, a pullback from its peak of 29% recorded in November 2024. At press time, a total of 33.5 million ETH is staked on the Ethereum network.

Ethereum staking was introduced alongside the launch of the Beacon Chain in December 2020, enabling investors to earn rewards while securing the network. Over time, ETH staking has gained traction, with major cryptocurrency exchanges such as Binance, Kraken, and others offering staking services to their users.

Additionally, staking led to the rise of a new market vertical known as liquid staking derivatives (LSDs). Currently, the LSD market is dominated by Lido (LDO), which commands nearly 69% of the total market share. Binance Staking follows, holding approximately 15% of the LSD sector. 

However, since Donald Trump’s victory in the November 2024 US presidential election, the regulatory landscape has shifted, creating an environment that may encourage the entry of new staking protocols, intensifying competition in the LSD space.

That said, there are concerns about the high concentration of the LSD market commanded by Lido, which is likely to rise even more if the ETH staking percentage continues to dwindle. A single LSD protocol having so much influence on the staking ecosystem could run against Ethereum’s decentralization ethos.

Is ETH Losing Its Charm?

Despite being the second-largest digital asset with a market capitalization exceeding $327 billion, Ethereum appears to be losing favor among large investors who may be seeking better returns in alternative blockchain ecosystems.

For instance, data from DeFiLlama shows that the total value locked (TVL) in Solana’s (SOL) decentralized finance (DeFi) ecosystem surged from approximately $4.5 billion in September 2024 to as high as $11.3 billion in January 2025. This rapid growth was largely fuelled by the memecoin frenzy that took over the Solana ecosystem throughout 2024.

Meanwhile, Google Trends data indicates a notable decline in Ethereum-related search interest, dropping from 87 in November 2024 to 41 at the time of writing. This trend suggests that ETH may be losing traction, particularly when compared to competitors such as SOL, SUI, and XRP, which have experienced more dynamic price movements over the past year.

Recent on-chain data also suggests that ETH may be falling out of favour among crypto ‘whales.’ At press time, ETH trades at $2,712, up 2.8% in the past 24 hours.

Featured Image from Unsplash.com, Charts from Google Trends and TradingView.com