Why Bitcoin Price Is Down Today? Key Reason behind The BTC Drop

Bitcoin Price Prediction: Key Factors Behind BTC Price Drop Below 90K

Bitcoin (BTC), the world’s largest cryptocurrency, has hit a rough stretch nearly 29% below after reaching an all-time high of more than $126,000 in early October. The world"s largest cryptocurrency slid sharply below $90,000, reaching $89,500 for the first time in seven months.

The decline has caused a tremor in the market and the Fear & Greed Index has also moved to the “extreme fear” territory. A lot of traders are now fearing that the price could fall down even more, with some predicting BTC to drop as low as $75,000.

As liquidity weakens and macro uncertainty grows, the question is whether the bull run has ended or if this is merely a healthy pullback before BTC begins its next upward leg.

Key Reasons Why Bitcoin Price is Crashing?

• Bitcoin experienced a significant drop during the past weekend after it could not regain the crucial $92,000 support area. The point was transformed into resistance, the market sentiment turned negative.

• The halving of Bitcoin in April 2024 and the peak six months later coincide with previous cycles, but the market behavior has changed due to the influence of institutional investors. Numerous traders are afraid of the next phase, which has historically been a major drawdown. Some are exiting early.

• Bitwise CIO Matthew Hougan states that retail sentiment is "so bad" that further downside is possible. It is a fragile environment created by miners selling at a loss, the liquidation of leveraged positions, and the fear of repeating past cycles is overpowering the price to be driven by fundamentals.

• The shutdown of the government has resulted in key economic data being delayed, and the Fed has adopted a more cautious approach because of that. Fed Chairman Jerome Powell has stated that further rate cuts are "not a foregone conclusion," while Boston Fed President Susan Collins has indicated that rates may have to stay at the current level for an extended period.

• Analysts caution that the Fed's hawkish stance is a notable factor in the sell-off, with Henry Allen from Deutsche Bank pointing out that investors usually underestimate how much Fed's commentary impacts not only stocks but also crypto which is considered part of the risk assets.

• According to CoinGlass liquidation data, Over 180,975 traders were liquidated in last 24 hours with a total liquidation exceeding $1 billion - mainly from long positions. The largest single liquidation was a massive $96.51 million BTC-USD trade on Hyperliquid which serves as a testimony to the brutality of this abrupt market pullback.

• The current price of BTC is around $89,700, which has decreased by 5.94% in the last 24 hours and by more than 14% during the week. The fear level significantly increased when Bitcoin plunged below the critical psychological level of $90,000, unleashing a chain reaction of forced liquidations.

Bitcoin ETFs See Heavy Outflows Amid Sell-Off

As per ETF flow data from SOSO Value, “Bitcoin Spot ETFs have bled over $1.89B in four days, including a $254M outflow yesterday, revealing intense sell pressure as BTC fights to hold $90K.”

BTC Price Prediction: What’s Next For BTC?

BTC is currently trading near $89,700, sitting right at the lower boundary of its descending channel, which has been firmly intact since the October peak. The breakdown below the key support levels of $107,000 and $98,000 shows strong bearish momentum, further confirmed by the RSI hovering in oversold territory.

If it fails to hold above the $89,000–$90,000 zone, the next major support lies near $75,000, making a deeper correction possible. The appearance of a “death cross” and increasing long-position liquidations raise red flags.

However, if buyers successfully defend this level and a rebound occurs, BTC could retest the upper trendline of the descending channel around $100,000–$102,000.

A breakout above the $107,500 resistance and the 200-day EMA would be the first strong signal of a bullish reversal. Overall, the short-term trend remains bearish, but a relief bounce is likely if the current support holds.

Source: TradingView

For now, the market remains on edge, waiting to see whether this drop becomes a deep correction or a major buying opportunity.