BTC/USD Analysis: Why Bitcoins Price Dropped Below $90K
The BTC/USD chart shows Bitcoin dipping below $89K todaythe first time since November 2024, when the leading cryptocurrency surged on news of Donald Trumps presidential victory.
We previously posted:
28 January: Bitcoin Holds Above $100KFor Now
11 February: How Trump Affects Bitcoins Price
In those analyses, we highlighted the extreme trading volumes during Trumps inauguration and the heightened crypto market volatility. These conditions may have allowed major players to take profits after the 2024 rally. The subsequent price action has confirmed this bearish outlook.
Technical Analysis of BTC/USD
Since the surge in market activity during Trumps inauguration (marked by a red arrow), Bitcoin has:
Formed a descending channel
Failed to break the psychological $100K level (black line)
Dropped below key support around $91K
A rebound attempt from the lower boundary of the long-term blue channel (blue arrow) was unsuccessful. In this environment, negative news could have aided bears in pushing Bitcoin towards the lower boundary of the channel.
Bitcoins Price Crash on 25 February
Bitcoins decline may have been driven by:
Market concerns over the ByBit hack, where around $1.5 billion in ETH was stolen
South Korean government sanctions on crypto exchange Upbit
A drop in US tech stocks ahead of Nvidias earnings report and PCE Price Index data, signaling investor caution toward risk assets
This bearish momentum has resulted in an almost 8% drop in under 24 hours, with over $1 billion in long positions liquidated across crypto exchanges. The RSI indicator is now near multi-month lows.
Bitcoin Price Outlook
BitMEX co-founder Arthur Hayes predicted on X that Bitcoin could fall to $70K if major hedge funds exit US Bitcoin ETFs.
This suggests further downside within the red descending channel. However, Bitcoin is near the lower boundary of this channel, meaning it could act as short-term support.
Read more: https://fxopen.com/blog/en/oa-btc-usd-analysis-why-bitcoins-price-dropped-below-90k/
Text source: Forex Trading Blog
