Bitcoin falls below $90,000 for the first time since November

Bitcoin prices plummeted on Monday, January 13, falling below $90,000 and reaching a multi-week low as multiple factors contributed to the bearish activity.

The world’s most prominent cryptocurrency, which celebrated its sixteenth birthday earlier this month, fell to nearly $89,000, according to what Reuters reported. Coinbase data from TradingView.

As a result, the digital asset has fallen nearly 18% from its all-time high of over $108,000, additional Coinbase numbers from TradingView show. After that, it traded at its lowest level since around November 19.

‘A combination of factors’

When asked about the reason for these recent declines, analysts highlighted several possible reasons.

“Bitcoin’s recent decline below $90,000 likely stems from a combination of factors, including macroeconomic pressures such as rising interest rates and recession fears, regulatory concerns, and the cascading divestment of leveraged positions,” said Joe DiPasquale, CEO of Bitcoin. Cryptocurrency hedge fund Pitbull Capitalhe wrote via email comments.

“Market sentiment may also have been shaken by profit-taking, lower institutional adoption news, or technical violations of key support levels, all of which exacerbated the sell-off,” he added.

Expectations of interest rate cuts by the Federal Reserve

Many market watchers have highlighted how the strong economic data has affected many’s expectations of interest rate cuts by the Federal Reserve and the impact on risk assets, including stocks and cryptocurrencies.

“The price of Bitcoin has been highly correlated with the stock market in recent weeks, which has come under material pressure. This is due to the economic data released that prompted traders to pull back on all Fed cut expectations during 2025. Swan Bitcoincame via email comments.

“Traders are no longer expecting any cuts. “My view is that this is almost untrue and will cut, but the change in sentiment has pulled the S&P 500 to what was a correction of just over 5% at this morning’s low.”

“This had a strong impact on the price of Bitcoin,” Lubka stressed.

Greg Magadini, Director of Derivatives at Digital Asset Data Provider Amberdataalso commented on these matters.

“The stock market (and risk assets) remains sensitive to the Treasury yield curve and expectations of future Fed cuts, since the hawkish rhetoric in the FOMC statement in December,” he said via email.

The market watcher confirmed that after last month’s FOMC policy meeting, minutes indicated that Fed policymakers were “comfortable with holding higher rates for longer.”

“With a strong labor market, potential price inflation due to tariffs, and a shrinking low-wage workforce due to immigration policy reforms, the US interest rate curve could certainly remain a drag on stocks and risk assets if inflation rises again.” Magadini stated.

“Keep in mind that the equity risk premium (extra return on risk-free bonds) remains historically low, which explains the bearish reaction in stocks as yields rise, despite a strong economy. Although inflation could be bullish for cryptocurrencies For gold in the longer term, the immediate effect is a reversal of lower prices as price expectations shift towards “higher for longer”.

Brett Sivling, Wealth Manager at Gerber Kawasaki Wealth Management and InvestmentsHe also talked about the expectations surrounding the Federal Open Market Committee, but also highlighted some other factors when explaining the latest price movements of the world’s most valuable digital currency.

“As for Bitcoin, this sell-off appears to be triggered by continued risk-off sentiment and news that the US government has received court approval to sell its massive stock of Bitcoin acquired from the Silk Road days,” he said via email.

“This does not mean that the United States will sell all of its holdings, but the expectation is that it will auction off cryptocurrencies as it does with other assets such as real estate or cars,” Sivling added.

In terms of key developments that Bitcoin investors should watch over the coming weeks and months, he offered his thoughts.

“Going forward, Bitcoin investors will be watching the inauguration of Donald Trump as a potential bullish catalyst and the ongoing FTX claims dividends as a downside risk.”

Disclosure: I own some Bitcoin, Bitcoin Cash, Litecoin, Ether, EOS, and SOL.