Bitcoin will fall by 17% if the key level is breached due to inflation and Trump fears
- Standard Chartered Bank said the digital asset faces a significant downside risk if the price of Bitcoin falls below $90,000.
- In this scenario, the token could fall by as much as $80,000.
- Such a decline from current levels would amount to a drawdown of 17%.
Cryptocurrency bulls expect President-elect Donald Trump’s deregulation agenda to be dispatched Bitcoin higher this year. But first they may have to endure a sell-off.
That could happen if the flagship token falls below $90,000, and the risks of that are real, Standard Chartered warned in a note on Tuesday.
“We believe a clean break below $90,000 for BTC will unlock an additional 10% downside in the near term, to the low $80,000s,” wrote Jeff Kendrick, Global Head of BTC. “All other digital asset prices will likely follow.” . Digital asset research. In this scenario, it is entirely possible that forced or panic selling could amplify the ongoing sell-off currently driven by economic fears.
Although Bitcoin’s price briefly reached $97,000 on Tuesday, the coin traded near the key threshold just a day ago. Along with other crypto assets, the coin has fluctuated wildly this year as risk-off sentiment gripped investors. According to a commentary from FXPro, the cryptocurrency market capitalization fell to its lowest levels in three and a half weeks as of Monday evening.
Some of this stems from the same factors What stocks and bonds suffer from. Bitcoin has fallen more than 10% from its price An all-time high of $108,000 was reached last monthexperiencing deflation when investors started Suspected monetary policy tightening In 2025. Bitcoin will typically decline when interest rates are high.
But from here, any further decline in crypto assets will be a self-fulfilling prophecy, Kendrick noted.
ETF investors who have bought bitcoin since the November presidential election now face an absolute profit of zero, given the recent price fluctuations. This remains true as long as bitcoin remains above $90,000, but a deeper decline will prompt investors to uninvest in panic, Kendrick said.
“When prices rise, selling tends to come mostly from long-term holders who take profits. When prices fall, selling tends to come more from short-term holders who sell at a loss. On-chain data shows that in recent days 50-70% of sales were at a loss, he wrote.
What might make Bitcoin fall below the support level? While Wednesday’s headline inflation report will play a key role in the near term, bullish policy expectations could lead to market disappointment in the coming weeks.
Since Donald Trump was elected president, the market has enjoyed a bout of mid-market buying Excitement for crypto-friendly policies. The incoming administration has pledged to reform regulations, pass key legislation, and Never sell government-held Bitcoin. But if such changes are made quickly, investors could become frustrated, Kendrick said.
If a correction brings Bitcoin down to the $80,000 level, the symbol will suffer a roughly 17% decline from Tuesday’s high.
However, Alex Kuptsikevich, chief market analyst at FxPro, predicted on Monday that a contraction in risk appetite could deepen the future decline – a negative scenario would take Bitcoin back to $74,000. Bitcoin has certainly held its ground since Monday’s low, boosting the prospects for a recovery.
In the long term, both analysts still see a healthy bullish case for the top symbol. Since last year, Kendrick has been predicting that Bitcoin would reach this level $200,000 by the end of the year As institutional demand for cryptocurrencies rebounds under Trump’s policies.
