Analysts are warning that Bitcoin’s price may continue to decline, potentially dropping to $81,000. This comes as exchange-traded fund (ETF) outflows and market uncertainty persist. On February 25, Bitcoin fell to a three-month low of $87,629, breaking the psychological support line of $90,000 for the first time since January 13, according to data from Cointelegraph MarketsPro.
The current sell-off is primarily driven by a decrease in risk appetite among crypto investors, according to Ryan Lee, the chief analyst at Bitget Research. In the absence of positive catalysts, Lee believes that the correction could push Bitcoin’s price as low as $81,000. He stated, “Bitcoin price is moving within a consolidation range, and a drop to the $89,000 level indicates that bears are pushing the price below its support levels. If bearish behavior continues, the next support levels to be tested are around $86,000 and $81,000.”
This correction occurred despite Michael Saylor’s Strategy making a $2 billion Bitcoin investment shortly after raising $2 billion in a senior convertible note offering, as reported by Cointelegraph on February 24. The lack of a positive price response suggests that Bitcoin may require a significant increase in momentum to recover, according to Lee.
There is a risk that Bitcoin’s price could depend on the key support level of $85,000. A correction below this level would trigger over $1 billion worth of leveraged long liquidations across all exchanges, as shown by CoinGlass data. Hong Yea, the co-founder and CEO of hybrid crypto exchange GRVT, stated, “The $85,000 level is crucial. If BTC breaks below this support, it could lead to further declines. Geopolitical concerns, economic uncertainties, and unpredictable policy changes affecting broader business and economic issues may push BTC below $85,000 in the short term.”
Additionally, the recent $1.4 billion Bybit hack, the largest hack in crypto history, has dealt a significant blow to the market, although its impact is expected to be temporary.
Bitcoin’s decline is also a result of a wave of selling in US spot Bitcoin ETFs. On February 24 alone, these ETFs recorded over $516 million in net outflows. According to data from Farside Investors, the ETFs have now experienced six consecutive days of selling, leading to a more than 7% decrease in Bitcoin’s price since the start of the selling spree on February 18.