Today, the price of Bitcoin dropped below the psychologically significant $90,000 level for the first time since late April, with the decline from last month’s all-time high now approaching -30%.

Why is Bitcoin Falling?

One of the main reasons is the highly leveraged nature of the cryptocurrency market. According to Coinglass, $1 billion worth of positions — mostly longs — were liquidated over the past 24 hours, putting pressure on the price and triggering a cascading effect in the BTC/USD decline.

On the fundamental side, the media highlight growing doubts that the US Federal Reserve will cut interest rates any time soon. The prospect of a prolonged period of tight monetary policy continues to weigh on risk assets, including Bitcoin. This has led to outflows from spot Bitcoin ETFs (around $1 billion last week) and rising market anxiety — the Binance Fear and Greed Index stands at 15, signalling extreme fear.

Technical Analysis of the BTC/USD Chart

Following the explosive rally at the start of October, Bitcoin has been forming a descending channel, and today BTC/USD slipped below its lower boundary.

Bulls may hope that the drop beneath the psychological $90k level will spark a rebound (similar to the price action after the dip below $100k in early November, which resulted in a period of consolidation shaped like a Bull Flag).

Analysts at Santiment also point out that many cryptocurrencies have entered a zone of short-term “extreme oversold” conditions, which could increase the likelihood of a temporary recovery — potentially with a retest of the $100k area.

However, even if a rebound does occur, it is fair to say that the bullish sentiment that characterised early 2025 has been dealt a serious blow.

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