Bitcoin Price Analysis: Sharp correction as market tests support levels below $90,000

Currently trading at just under $95,000, Bitcoin (Bitcoin) has fallen significantly from its all-time high of $108,230 as the cryptocurrency market absorbs the Federal Reserve’s hawkish stance on interest rates and lower liquidity expectations for 2025.

Bitcoin price analysis

Entering the corrective zone, major cryptocurrency Bitcoin fell more than 14% from its peak and helped cause a massive sell-off in the $500 billion cryptocurrency market. Technical analysts are highlighting several worrying signals, including important support levels being tested and bearish Difference on RSI (Relative Strength Index).

alex kubtskevich, So they broke “Markets continue to absorb the Fed’s tougher tone, reinforced by the accumulated desire to take profits after a strong year,” says the senior market analyst. With some experts predicting possible drops to the $70,000 range, limited liquidity during the holidays may amplify price volatility.

BTC/USD Technical Analysis: Key Support Levels to Watch

Bitcoin/US Dollar

Several technical indicators point to a more negative possibility:

• The key Fibonacci retracement level at $89,000 is a vital support area; Minor support levels are $76,930 and $67,100.
• These levels match on-chain data revealing notable buyer accumulation areas, particularly at $77,792, the realized price for a short-term hold of one to three months.

BTC and institutional investors

Institutional interest is very evident even with the market downturn. After purchasing 619.70 bitcoins for about $61 million, Tokyo-listed Metaplanet has significantly expanded its holdings by 54%. However, the value of shares of other institutional companies such as MicroStrategy fell by 9% in line with the general market correction.

Global liquidity challenges

The worrying relationship between Bitcoin price and global money supply (M2) points to potentially more negative outcomes. Lowest level since August 2024, global M2 fell $4.1 trillion to $104.4 trillion. Historical trends suggest that this could signal a notable change in Bitcoin prices in the coming weeks.

Bitcoin price forecast

Although Bitcoin is still up 120% year to date, experts are concerned about the short-term price action. Technical and on-chain indicators point to a possible test of $89,000; Some experts do not rule out more significant corrections to the $70,000 area. However, there is strong support at $77,492 and $60,504, marked by a noticeable build-up of buyers.

The market view remains particularly vulnerable to macroeconomic events; Future price movement depends a lot on the path of federal interest rates. “Monetary easing has always favored the price of Bitcoin, and the opposite has a negative impact on the price,” says Yuya Hasegawa of Bitbank.