Bitcoin‘s Essential Test: Will Bulls Defy the Looming $85K Breakdown?
As Bitcoin plunged below the psychological $90,000 barrier for the first time in 2025, crypto enthusiasts found themselves white-knuckling through what might be the asset’s most significant test of the year.
Trading at $88,960.09 on February 26, Bitcoin’s 3.31% decline in the last 24 hours has shaken even the diamond-handed HODLers. Tuesday’s 9% slump was brutal. No sugar-coating it.
The technical picture? Not pretty. Bitcoin smashed through its consolidation zone of $93,450 to $99,150 like a wrecking ball through drywall.
Now trading below both the annual VWAP and 50-day moving average, bears are flexing. The $89,000 support level is hanging by a thread, with vital support at $86,800 looking increasingly vulnerable. The upcoming mining reward reduction in April 2024 to 3.125 bitcoins could further strain market dynamics.
ETF outflows aren’t helping. Over $1 billion fled Bitcoin ETFs in the last trading week. Those institutional investors who jumped in since November? They’re underwater, with an average purchase price of $96,500.
Standard Chartered thinks we’ll see a $1 billion outflow day right before we hit bottom. Cheery thought.
Despite the bloodbath, the long-term outlook remains stubbornly optimistic. Major financial players are sticking to their guns.
Standard Chartered and Bernstein see $200,000 by December. Fundstrat’s Tom Lee is calling for $250,000. This bullish stance is supported by the historical halving cycles that suggest potential price peaks between $180,000 and $350,000 by the end of 2025. Raoul Pal even floated a “blow-off top” scenario of $500,000. Dreamers or visionaries? Time will tell.
The current cycle mirrors patterns from 2013 and 2017. Bitcoin entered its Appreciation Phase in February 2024, with the Acceleration Phase kicking off on July 15, 2024.
If history repeats, we could see a cycle top in Q2 2025.
For now, all eyes are on those support levels – $86,800, $85,000, and if things get ugly, $81,700. The massive liquidation of long positions totaling nearly $331 million in just two days underscores the intensity of the current selling pressure.
The halving cycle, political landscape, and institutional adoption could all play savior. Or not. This is crypto, after all. Nothing is certain except volatility.
