Bitcoin Price Analysis: BTC’s Slump Below $85,000 Sparks Market Concern

Bitcoin (BTC) registered its largest three-day decline since November 2022 as it fell nearly 13% thanks to waning institutional demand, record institutional outflows, mounting liquidations, and adverse macroeconomic conditions. 

Investor sentiment was also dampened after President Donald Trump's confirmed tariffs against Canada and Mexico would go as planned. BTC is down nearly 3% during the current session and declined over 11% during the week. The flagship cryptocurrency is trading just above $86,000. 

What’s Behind Bitcoin (BTC)’s decline?

Bitcoin's (BTC) trading range resolved bearishly as it plunged below $90,000, registering its biggest three-day decline since the FTX collapse. The selloff coincides with investor disappointment over the lack of swift action from the Trump administration on tightening fiat liquidity conditions and the promised strategic Bitcoin reserve. BTC has also registered a sharp decline in institutional interest, pushing CME futures closer to backwardation. Markets are waiting for March 4, the deadline set by Trump for the tariffs to kick in. Analysts also advised investors not to pin their hopes on Friday’s US core Personal Consumption Expenditure (CME) to put a floor under risk assets. 

Core PCE, which excludes food and energy components, is expected to have risen 2.6% year-on-year in January, down from December’s 2.8%. Slower inflation is generally associated with a greater probability of Fed rate cuts and risk-on. However, markets could focus on the ongoing uptick in inflation metrics. According to Noelle Acheson, author of the Crypto is Macro Now newsletter, markets could see the decline in core PCE numbers as a sign of economic weakness. 

“Anyway, even if the PCE comes in softer than forecast, it could be taken as confirmation of slowing growth, sending markets into another whirlwind of concern. So, this bad mood is largely macro-driven. For most portfolios, the risk-asset/safe haven duality suggests that there is a price at which new longer-term investors will start to come in – this encourages traders to come back in, also.”

MARA Delivers Record Profits 

MARA Holdings has registered record financial results for the fourth quarter and full year 2024. MARA Holding’s net income, revenue, and adjusted EBITDA increased significantly despite BTC’s halving event. The cryptocurrency miner reported a 37% increase in Q4 revenue, which rose to $214.4 million, and reported full-year revenue growth of 69% to 656.4 million. Net income rose an unprecedented 248% to $528.3 million for the quarter, while adjusted EBITDA reached $794.4 million, up 207% from the previous year. The company stated in its shareholder letter, 

“2024 was a transformative year for MARA. We accelerated our transition to a vertically integrated energy and digital infrastructure company. We now have greater control over our energy, infrastructure, technology, and ultimately, our future.”

The Bitcoin miner also significantly expanded its energy capacity, securing approximately 1.2 Gigawatts at a price 28% lower than what industry peers paid for similar acquisitions. The move allowed MARA to increase its data center portfolio from 0% to 70% since the beginning of 2024. Investors are watching the company’s stock as it deploys its first power-generating assets. The company has also increased its BTC holdings to 44,893 BTC, valued at approximately $4.6 billion. MARA mined 2,492 BTC in Q4 and purchased an additional 15,574 BTC using proceeds from convertible senior notes offerings. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) experienced a new wave of selloffs late on Wednesday, dragging the flagship cryptocurrency below $85,000 to an intraday low of $82,081. The crypto market has been reeling since Monday after Trump announced tariffs against Canada and Mexico will go ahead as planned in March. Mounting liquidations, ETF outflows, and other macroeconomic factors have also hampered investor sentiment, leading to a decline in the price of BTC. BTC has traded in the red most of the week, contrasting with expectations it would cross $100,000. 

The flagship cryptocurrency registered a sharp fall last Tuesday, dropping to an intraday low of $93,431 before recovering to reclaim $95,000 and settle at $95,634. BTC recovered on Wednesday, registering an increase of under 1% to settle at $96,386. Buyers retained control on Thursday as the price rose nearly 2% to move past the 20-day SMA and settle at $98,251. With bullish momentum building, analysts expected an imminent move past $100,000. However, that outlook changed on Friday after hackers stole $1.4 billion worth of ETH from Bybit, sending shockwaves through the crypto ecosystem. As a result, BTC encountered considerable volatility on Friday before dropping over 2% to go below the 20-day SMA and settle at $96,184.

Source: TradingView

BTC recovered on Friday, registering a marginal increase, but fell back in the red on Sunday, dropping to $96,084 after a marginal decline. Bearish sentiment intensified on Monday as markets started the week in the red. As a result, BTC dropped nearly 5% to slip below $95,000 and settle at $91,622. The price continued to fall on Tuesday as it lost the crucial $90,000 level on its way to an intraday low of $85,985 before recovering to settle at $88,654. Bearish sentiment intensified on Wednesday as BTC plunged to an intraday low of $82,081. It recouped some losses from this level, ultimately settling at $84,129 after a drop of over 5%. The current session sees BTC up 2.53% as it looks to recover and reclaim $90,000. 

If BTC’s decline continues, it could slide to $70,000. Buyers must reclaim $90,000 to prevent a further decline. Markus Thielen, the founder of 10X Research, believes BTC could drop to $72,000-$74,000 in a worst-case scenario. 

“In a worst-case scenario, Bitcoin could drop to the $72,000–$74,000 range, where a rebound will likely occur.”

BTC has rebounded to $86,000 during the current session after finding a demand zone around $82,000, as identified by Thielen in a client note. He identified the level by analyzing an on-chain metric, suggesting a potential demand zone lies around $82,000. 

“Historically, bitcoin rarely trades below this (short-term holders' realized price] level in bull markets for extended periods, whereas, in bear markets, it tends to stay below it for longer durations. During the summer 2024 consolidation, bitcoin dropped $9,616 below this metric, now at $92,800.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.