Bitcoin fell sharply on Tuesday, dropping under the key $90,000 threshold and trading near $89,896 — its lowest level since February. The decline has erased all gains made this year and pushed losses to almost 30 per cent from the October peak of $126,000, shaking confidence across global crypto markets.
The latest downturn follows a series of economic, technical and structural pressures building over recent weeks. Analysts say the combination of tightening financial conditions, institutional selling and renewed fears tied to legacy exchange Mt. Gox has created one of Bitcoin’s most challenging trading environments in months.
One of the heaviest pressures is the shifting outlook for US monetary policy. Hopes for a Federal Reserve rate cut in December have weakened, with odds now falling below 50 per cent. Investors are responding to a more hawkish tone from the central bank, set against a backdrop of strained liquidity following the extended US government shutdown. Henry Allen of Deutsche Bank cautioned that markets may be underestimating the impact of the Fed’s stance on risk-sensitive assets such as Bitcoin.
Institutional flows have also reversed. Spot Bitcoin ETFs, which earlier in the year attracted significant investment, have now recorded steep outflows. More than $2.5 billion has exited US spot ETFs this month alone, including nearly $900 million withdrawn from BlackRock products. Maja Vujinovic, CEO of FG Nexus, said major allocators are moving to reduce exposure after what has been a strong multi-month rally.
Market jitters intensified further after the collapsed exchange Mt. Gox moved over 10,600 BTC — valued at nearly $950 million — to new wallets and to Kraken. The transfers have reignited concerns that creditors could soon begin liquidating assets, raising fears of additional downward pressure. Some analysts warn prices could slide closer to Bitcoin’s realized price of around $56,000 if such selling accelerates.
The recent drop has also triggered widespread leveraged liquidations. When Bitcoin failed to hold above $92,000, more than $1 billion in positions was wiped out within 24 hours, accelerating the sell-off and pushing the currency below $90,000. Traders say the loss of this psychological support has heightened uncertainty in the near term.
Opinions on whether the current slump represents a buying opportunity are sharply divided. Prominent voices such as Cameron Winklevoss claim prices below $90,000 may not last long. Others, including Raoul Pal of Real Vision, argue that waiting for steadier trading conditions may be sensible, especially if Bitcoin fails to hold above the $88,000 support region.
Analysts remain split over what comes next. Some insist long-term fundamentals remain intact, with forecasts for late 2025 still pointing to potential highs between $150,000 and $200,000. Others highlight technical risks, including a recent “death cross” in which the 50-day moving average dipped below the 200-day average — a pattern sometimes associated with prolonged downturns.
Ryan Lee, Chief Analyst at Bitget, said traders should expect volatility as markets adjust to shifting expectations for US policy and concerns surrounding market-maker stability. He expects Bitcoin to fluctuate between $90,000 and $110,000 in the near term, with ether likely to trade in the $3,000 to $3,600 range unless a significant breakdown occurs.
