Bitcoin’s price may experience further decline, as analysts warn of a potential drop to $81,000 due to ongoing exchange-traded fund (ETF) outflows and market uncertainty.
On February 25, Bitcoin (BTC) fell to a three-month low of $87,629, losing 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 mainly attributed to diminishing risk appetite among crypto investors, explained Ryan Lee, chief analyst at Bitget Research.
In the absence of positive catalysts, the correction could push Bitcoin’s price as low as $81,000, Lee told Cointelegraph. He added, “Bitcoin price is moving within a consolidation range, and a drop to the $89,000 level indicates that bears are pushing beyond its support levels. If the bearish behavior continues, the next support levels around $86,000 and $81,000 may be tested.”
Interestingly, this correction occurred despite a $2 billion Bitcoin investment from Michael Saylor’s Strategy, which came 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 need significantly more momentum to recover, according to Lee.
Bitcoin’s downside risk is also tied to the crucial support level of $85,000. A correction below this support level would trigger over $1 billion worth of leveraged long liquidations across all exchanges, as indicated by CoinGlass data. Hong Yea, 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 could push BTC below $85,000 in the short term.”
Additionally, the recent $1.4 billion Bybit hack, the largest hack in crypto history, has also had a significant impact on the market, although its effects are expected to be short-lived, Yea concluded.
Bitcoin’s decline followed another wave of selling in US spot Bitcoin ETFs, which saw more than $516 million in net outflows on February 24 alone. According to data from Farside Investors, the ETFs have now experienced six consecutive days of selling since their selling spree began on February 18, leading to a more than 7% drop in Bitcoin’s price.