Bitcoin Price Analysis: Can BTC Reclaim $90,000 Or Is A Deeper Correction On The Horizon?

Bitcoin (BTC) is struggling to recover after a bloodbath at the beginning of the week that saw the price drop to an intraday low of $86,007 on Tuesday, with market watchers worried about a deeper correction that could drag the price to $80,000. 

BTC declined over 8% during the week as markets tumbled after Donald Trump announced that planned tariffs on Canada and Mexico would go ahead after the 30-day pause lapses. 

Meanwhile, spot Bitcoin ETF outflows have continued, experiencing outflows of over $500 million on Monday. Mounting liquidations have also hampered investor sentiment. 

Strategy Stock Crashes As Bitcoin (BTC) Dips Below $90,000

Strategy (MSTR) registered an 11% stock decline on Tuesday as BTC plunged below $90,000, sparking fears of a forced liquidation for the company. Strategy’s stock has been on a steady decline since peaking in November. The decline comes after an earlier rally driven by Donald Trump’s election victory, which led to a massive jump in the price of cryptocurrencies. Following its latest purchase, Strategy holds 499,096 BTC valued at $43 billion. However, with BTC dropping below $90,000, investors speculate that Strategy may sell some of its holdings. 

However, the possibility of the company selling its Bitcoin holdings is highly unlikely according to the Kobeissi Letter. 

“Michael Saylor was asked about liquidation recently. His answer was that even if Bitcoin fell to $1, they still would not get liquidated. They would just buy all of the Bitcoin. While this sounds good in theory, the convertible note holders cannot be forgotten. From a technical viewpoint, forced liquidation of $MSTR is not necessarily impossible. But, it is highly unlikely. This is particularly due to the way the convertible notes are structured and the multiple price variables at play. It would need a "mayday" situation to occur.”

This is primarily due to Strategy’s convertible notes, which are a significant source of its capital. Strategy generates capital by issuing 0% convertible notes to investors and using them to purchase Bitcoin. The firm's convertible notes do not mature until 2028, making it difficult to liquidate its Bitcoin holdings. 

Bitcoin ETFs See Outflows Continue 

Bitcoin ETFs registered substantial outflows on Monday, with over $516 million withdrawn, according to data from Sosovalue. Fidelity’s FBTC saw the most withdrawals, accounting for $246 million, followed by BlackRock’s IBIT, which registered $158 million in outflows. Other notable outflows included GBTC and BTC funds that saw outflows of $59 million and $6 million. Invesco’s BTCO and Wisdomtree’s BTCW saw outflows worth $15 million and $12.5 million, while Bitwise’s BITB and Vaneck’s HODL shed $10 million and $7 million. 

These outflows suggest a negative shift in investor sentiment, driven by market volatility and President Donald Trump's announcement that tariffs against Canada and Mexico will go ahead as planned in March. 

Tuesday registered even more significant outflows as BTC fell to a three-month low. As a result, investors withdrew funds from Bitcoin ETFs at an unprecedented rate. The 11 spot Bitcoin ETFs registered a cumulative net outflow of $937.78 million, the most significant single-day redemption since funds began trading in January 2024. Fidelity’s FBTC saw outflows totaling $344 million, while BlackRock’s IBIT saw outflows of $164 million. The remaining ETFs registered outflows of less than $100 million each. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) is struggling to recover during the ongoing session, with sellers having driven the flagship cryptocurrency below $88,000. BTC is down just over 1% during the current session, with bears aiming for $85,000. A break below this level could see the price drop to $80,000. While analysts expected BTC to break above $100,000 last week, macroeconomic conditions and the Bybit hack have dampened investor sentiment, as BTC fell below key support levels and moving averages. President Donald Trump indicated on Monday that proposed tariffs against Canada and Mexico will go ahead as planned, putting the market on edge about the impact on global trade. This led to a flight from risk assets like BTC, leading to a significant price decline and ETF outflows. Marcel Heinrichsmeier, a crypto analyst at DB Bank, stated, 

“The macroeconomic situation has been the main reason for the price decline in the last few hours. The Bybit hack and the memecoin turmoil of the past few weeks have contributed to a generally worse mood in the crypto market than at the beginning of the year.”

Chris Wayn, co-founder of Galxe, a decentralized blockchain-based platform, stated the sell-off was not unexpected after the biggest hack in crypto history. 

“The brutal sell-off happening in crypto is not unexpected, considering we’ve just seen the biggest hack in our history. This has been compounded by further fears over global tariffs.”

Joseph Edwards, the head of research at Enigma Securities, called the sell-off a delayed reaction to the Bybit hack, stating, 

“Markets held up peculiarly well in response to what was expected to be a significant destabilizing event ... but there tends to be a price to be paid further down the line. We've seen the classic thing where a slight contraction in risk has caused a small cascading sell-off within crypto markets specifically.”

The change in sentiment can also be attributed to the fact that policy changes in the US have not lived up to expectations. Trump campaigned on the promise of making the US the crypto capital of the world and creating a strategic Bitcoin reserve. However, besides the appointment of a few crypto-friendly appointments, there has been little news for investors. 

BTC registered a sharp decline last Tuesday as it fell to an intraday low of $93,407 before recovering to settle at $95,663. Sentiment changed on Wednesday as BTC registered an increase of under 1% to reclaim $96,000 and settle at $96,675. Bullish sentiment intensified on Thursday as BTC registered a rise of 1.75% to move past the 20-day SMA and settle at $98,364. However, the price fell back in the red on Friday following the Bybit hack, dropping over 2% to slip below the 20-day SMA and settle at $96,183.

Source: TradingView

BTC registered a marginal recovery on Saturday, rising to $96,616. However, it could not move past the 20-day SMA and fell back in the red on Sunday, dropping to $96,320 to end the weekend on a bearish note. BTC registered a substantial decline on Monday, dropping nearly 5%, going below key support levels and settling at $91,462. Bearish sentiment and volatility persisted on Tuesday as BTC plunged below $90,000, dropping to an intraday low of $86,007 before settling at $88,670. The current session sees BTC down just over 1% and trading at $87,706. However, the outlook remains bearish, with the RSI slipping below 30 to 28. The MACD also indicates that sellers have an overwhelming advantage. If BTC’s downtrend continues, it could drop to $85,000. A break below this level could drag it to $80,000.

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.