What Triggered Bitcoin’s Slide Below $90,000?
Bitcoin extended its steep selloff on Tuesday, plunging to 89,420 dollars during Hong Kong trading hours and wiping out the entirety of its 2025 gains. The move marks Bitcoin’s lowest level since February and comes just six weeks after the asset printed an all-time high above 126,000 dollars. The decline accelerated after BTC failed to reclaim the 93,700-dollar support zone over the weekend. That breakdown pushed the price below its 200-day moving average and triggered a “death cross” between the 50-day and 200-day trendlines — a signal that historically aligns with multi-week weakness when liquidity thins out. That is precisely what traders are seeing now. Spot ETF inflows, which absorbed more than 25 billion dollars earlier in the year, have stalled for nearly two weeks. Concerns around the Trump administration’s tariff agenda and the possibility of stickier inflation have led markets to reassess the odds of further Federal Reserve rate cuts. Corporate treasury buyers who aggressively accumulated Bitcoin during the first half of the year have paused their purchases. Retail sentiment has collapsed as well: the Crypto Fear & Greed Index fell to 11 on Monday, its lowest reading since the 2022 bear market. Social data shows traders shifting attention away from altcoins and back toward Bitcoin dominance, a pattern that often appears during capitulation phases or late-stage drawdowns.
Investor Takeaway
Sentiment has reached “extreme fear,” a level that sometimes precedes short-term relief rallies. But reclaiming major support levels remains the critical test for buyers.
Why Market Liquidity Is Breaking Down
The selloff is being amplified by macro uncertainty and thinning liquidity across risk assets. Traders are increasingly concerned that the Federal Reserve may delay further rate cuts, while the broader equity rally appears to be losing steam. Risk-off behavior has spread across crypto:
- Stablecoins are seeing more inflow than Bitcoin. Some investors are rotating into USDT and other dollar-pegged assets rather than buying BTC dips.
- ETF flows have turned negative. U.S. spot bitcoin ETFs have posted more than 3 billion dollars in net outflows over the past three weeks.
- Liquidity across major exchanges is thinning. Market depth worsened following the U.S. government shutdown, which elevated the Treasury General Account and constrained dollar circulation.
Analysts warn that if Bitcoin cannot reclaim the 93,000-dollar zone soon, the next liquidity pocket sits between 86,000 and 88,000 dollars — an area that could attract volatility if pressure continues. Broad crypto losses reflect the same trend. Ether has dropped nearly 40% from its August peak above 4,955 dollars. Solana, Cosmos-linked assets, and other major altcoins have also posted steep declines.
How Institutional and Corporate Flows Are Shifting
Institutional behavior has added to the downside momentum. According to market participants, some listed companies and funds that piled into Bitcoin during the rally have begun trimming exposure. That selling has contributed to contagion across correlated equities, including mining stocks and accumulation firms such as Strategy (MSTR), Riot Platforms, Mara Holdings, and exchange operator Coinbase. Corporate buyers, who helped push BTC above six figures earlier in the year, have temporarily paused accumulation. Retail investors remain cautious after October’s flash crash triggered 19 billion dollars in leveraged-liquidation cascades. Meanwhile, macro traders continue to monitor the December Federal Reserve meeting. The latest readings show a 57.1% chance that the Fed will not cut rates next month, according to the CME FedWatch Tool. Weak U.S. unemployment data on Thursday could shift expectations again, but for now, the market is preparing for tighter financial conditions.
Investor Takeaway
Macro signals matter more than technical patterns right now. ETF flows, rate expectations, and liquidity shifts are driving price action more than on-chain trends.
Key Levels, Market Risks, and What Comes Next
Below are several critical levels and catalysts that will define near-term direction:
- Support at 85,000–87,000 dollars. A decisive break below this range could open the path to 80,000 and potentially 74,000 dollars, last seen in February.
- Resistance at 90,000 dollars. Regaining this level would help restore confidence after sentiment hit extreme fear levels.
- The Federal Reserve’s December interest rate decision. A more dovish stance could ease selling pressure across crypto and revive ETF inflows.
- Year-end tax-loss harvesting. This could add short-term selling pressure as investors lock in losses or rebalance portfolios.
Despite the ongoing stress, some analysts argue that the magnitude of the sentiment shock could support a short-term bounce if macro conditions stabilize. Others caution that traders should expect continued volatility into year-end, especially if geopolitical headlines or ETF redemption cycles intensify. Overall, Bitcoin’s fall below 90,000 dollars signals more than a technical breakdown — it reflects a broad retreat from risk as liquidity tightens across global markets. Whether the move becomes a deeper correction or a temporary reset will depend heavily on ETF flows, economic data, and upcoming central bank decisions.