Bitcoin dips below $90,000, marking significant psychological break

Bitcoin dips below $90,000, signaling a significant psychological break; analysts highlight support levels and short-term recovery opportunities.

Source: The Block

Bitcoin dips below $90,000, marking significant psychological break

Bitcoin has recently dropped below $90,000, hitting a critical psychological level. Analysts say this shows the market’s fragility, especially with year-end volatility.

Key reasons behind the dip

According to The Block, Bitcoin fell to around $89,650 on Monday night, continuing its steep decline from late October. By 11:43 p.m., it slightly recovered to $89,990, still down 5.55% in the past 24 hours.

Rachael Lucas, crypto analyst at BTC Markets, said:
"Bitcoin has fallen below $90,000 today, a significant psychological break, highlighting the market’s fragility. Institutional investors are leading the move, with ETF outflows showing profit-taking and risk-off positioning ahead of year-end."

Notably, U.S. spot Bitcoin ETFs have recorded over $3 billion in net outflows over the past three weeks.

Vincent Liu, CIO at Kronos Research, added:
"BTC’s long-term value as digital gold remains intact. Yet, short-term traders, leveraged funds, and portfolio adjustments are weighing on prices."

Macro factors and asset rotation continue to drain liquidity. Recent U.S. government shutdowns also kept the Treasury General Account elevated, limiting non-essential spending.

Uncertainty around the Federal Reserve’s December interest rate decision also impacts sentiment. While traders hoped for a rate cut, recent reports show the Fed is still debating. CME Group’s FedWatch Tool shows a 57.1% chance the Fed won’t cut rates in December.

Government reopening could ease liquidity issues, potentially triggering a short-term market rebound.

Key levels to watch

Vincent Liu noted:
"BTC slipping below $90K signals a short-term retracement. Immediate support lies around $85K–$87K. Regaining $90K is crucial to restore buyer confidence, especially with the Fear & Greed Index still low at 11."

Lucas highlighted:

• Short-term support: $85,000

• Critical threshold: $80,000, below which BTC could drop to around $74,000, the February low.

Other macro events to monitor:

• Fed’s December rate decision

• U.S. employment report on Thursday

• Trade policy or geopolitical headlines

• Year-end tax harvesting

Major ETF announcements or network upgrades could stabilize sentiment.

Conclusion

Bitcoin dropping below $90,000 does not diminish its long-term value. Beginners should maintain a long-term mindset, discipline, and patience. Short-term dips are normal and can present attractive buying opportunities.

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