Bitcoin has seen a dramatic decline recently, dropping from a peak above $100,000 to approximately $91,200, triggering widespread uncertainty in the cryptocurrency market. This downturn has resulted in significant liquidations of positions held by traders.
The price decreased for three consecutive days, with a small rebound observed as it approached a local support zone. Currently, the price sits around $94,300, showing signs of recovery from local lows. Technical analysis indicates that Bitcoin has fallen below the 50-day exponential moving average, raising concerns among investors. The price levels align with lows formed during a consolidation phase starting mid-November.
Several factors are driving this downward trend. Notably, stronger-than-expected economic data from the U.S., particularly in the services sector and labor market, has diminished expectations for aggressive rate cuts from the Federal Reserve in 2025. This shift in economic sentiment has resulted in rising Treasury yields and a stronger U.S. dollar, which in turn has negatively impacted cryptocurrencies. Over the past 24 hours, the market has experienced more than $390 million in total liquidations, including roughly $54 million specifically related to Bitcoin.
Additionally, looming pressure from government actions has compounded the situation. The U.S. government is set to liquidate approximately 69,370 Bitcoins, valued at around $6.5 billion, which were confiscated from the Silk Road marketplace. This upcoming sale is expected to create further uncertainty in the market. Institutional sentiment has also weakened, manifested through significant outflows from exchange-traded funds (ETFs) and a decline in confidence among major investors.
From a technical standpoint, Bitcoin is currently testing the lower boundary of a consolidation channel established in mid-November. While it has dipped below the 50-day EMA, traders remain cautious but not necessarily pessimistic. The consolidation range appears to offer support, with significant levels at $91,000 and $80,500. A break below these levels could suggest that the sellers are gaining momentum, while stability above them could indicate a healthy correction within an ongoing upward trend.
Looking ahead, analysts have varying price predictions for Bitcoin, despite the recent downturn. Some anticipate a rebound and forecast prices ranging from $150,000 to $250,000 by the end of 2025. These projections are fueled by expectations of increased institutional adoption, the favorable impact of Bitcoin ETFs, and the possibility of crypto-friendly policies from the incoming administration.
In summary, while Bitcoin’s current decline may appear alarming, it has rebounded slightly from recent lows. Analysts hold an optimistic long-term outlook, and the market’s immediate focus will be on whether Bitcoin can stabilize and regain momentum above the $100,000 mark. Historical patterns suggest that such corrections may precede substantial rallies, particularly as Bitcoin continues to follow its established four-year cycle.