Bitcoin (BTC-USD) Crashes Below $86K – Is a Bigger Drop Coming, or Will Bulls Fight Back?
Bitcoin Plunges Below $86K Amid Record ETF Outflows and Trump Tariff Fears
Bitcoin’s recent downward spiral has intensified, pushing BTC-USD below $86,000, marking a 20% drop from its all-time high of $109,588. This dramatic decline follows a wave of $937.9 million in ETF outflows on Tuesday, the largest single-day withdrawal since the launch of spot Bitcoin ETFs in January 2024.
Adding to the bearish pressure is renewed uncertainty surrounding Donald Trump’s tariff policies on Mexico and Canada, which have spooked financial markets. Investors fear these tariffs could fuel inflation, delaying the Federal Reserve’s planned interest rate cuts and hurting risk assets like Bitcoin.
With Bitcoin now hovering around $88,800, traders are bracing for another leg down, as technical indicators suggest BTC could test support at $85,000, with a potential drop to $80,000 if selling pressure continues.
Bitcoin ETF Exodus – Why Institutional Demand is Fading
Bitcoin’s sharp sell-off has been fueled by a sustained withdrawal of institutional money from spot ETFs. In the past two weeks, Bitcoin ETFs have collectively lost more than $1.5 billion, indicating a significant reduction in investor appetite.
Last week alone, Bitcoin spot ETFs recorded $540 million in net outflows, extending the $580.2 million in redemptions from the week prior. The latest $937.9 million outflow on Tuesday suggests that institutional players are either taking profits or stepping to the sidelines amid market uncertainty.
This mass exodus is further confirmed by MicroStrategy’s recent Bitcoin acquisition, which failed to generate positive market sentiment. Michael Saylor’s firm purchased 20,356 BTC this week, yet the price of Bitcoin continued to tumble, signaling weak demand and growing concerns over macroeconomic headwinds.
With institutional investors seemingly in retreat, Bitcoin’s next price movements will largely depend on retail traders and market liquidity. If ETF outflows continue at this pace, BTC-USD could face additional downside pressure in the coming weeks.
Bitcoin Faces Critical Technical Levels – Is $80K Next?
Bitcoin’s price action is now dangerously close to key support levels, and if $85,000 fails to hold, BTC could extend its correction to $80,000 or lower.
A closer look at Bitcoin’s technical indicators reveals a double-top breakdown, with BTC failing to reclaim momentum above $90,000. The Relative Strength Index (RSI) is now at 30, signaling an oversold condition, but history has shown that BTC can remain oversold for extended periods before reversing.
The 50-day moving average (MA) sits at $98,500, while the 200-day MA is much lower at $80,400, a critical level that could act as a final line of defense for Bitcoin bulls.
If BTC fails to hold above $85,000, the next major support sits between $80,000–$74,000, a range that has historically acted as a demand zone. On the flip side, a break back above $94,000 could invalidate the bearish scenario and set the stage for a recovery rally toward $100,000.
Leverage and Liquidations – Why Bitcoin Could Still Drop to $75K
The recent crash has triggered $1.34 billion in liquidations, the largest single-day wipeout of leveraged positions this year. A cascade of long liquidations has fueled downward momentum, with market makers now targeting the $80,000–$75,000 range to clear out additional leveraged positions.
According to on-chain data, there is only $1.5 billion in long liquidations from the current price to $77,000, but a staggering $16 billion in short liquidations from $88,000 to $107,000. This imbalance suggests that if Bitcoin finds support and reverses upward, it could trigger a massive short squeeze, sending prices back toward $100,000 and beyond.
However, if BTC loses its key support zones, the next major downside target is $74,000, which marks the previous all-time high from 2021. Traders are now closely watching whether Bitcoin can hold above $85,000 or if another wave of liquidations will send it to fresh lows.
Macroeconomic Risks and the Trump Tariff Factor
Bitcoin’s sharp decline isn’t happening in isolation. Donald Trump’s proposed tariffs on Mexico and Canada have rattled financial markets, raising fears of inflationary pressures and delayed Fed rate cuts.
Traditionally, Bitcoin has been viewed as an inflation hedge, but in recent months, it has increasingly moved in tandem with risk assets like tech stocks and the Nasdaq 100. This means that if global markets continue to weaken, Bitcoin could remain under pressure.
Adding to market concerns is Federal Reserve Chair Jerome Powell’s stance on interest rates. The Fed initially signaled multiple rate cuts in 2024, but higher-than-expected inflation could delay these cuts, making non-yielding assets like Bitcoin less attractive.
What’s Next for Bitcoin? Buy, Sell, or Hold?
Bitcoin is now at a make-or-break moment, and the next 24 to 48 hours will be critical in determining its short-term trajectory.
If BTC can hold above $85,000 and reclaim $94,000, it could trigger a relief rally toward $100,000 as short liquidations fuel a bounce. However, if selling pressure intensifies and $80,000 is lost, BTC could quickly spiral down toward $74,000–$75,000, where it would need to find strong support to avoid further losses.
Final Verdict: Bitcoin Facing High-Risk Environment – Bullish or Bearish?
Right now, Bitcoin remains in a high-risk environment, and traders should be prepared for continued volatility. The key levels to watch are:
- $85,000 support – If it holds, Bitcoin could stage a recovery.
- $94,000 resistance – Needs to be reclaimed for a bullish move toward $100K.
- $80,000 breakdown – If BTC drops below this, expect a retest of $75K or lower.
Bitcoin’s Fate Hangs in the Balance – Will BTC Crash to $75K, or Rebound to $100K?
The coming days will reveal whether Bitcoin can shake off bearish sentiment or if the worst is yet to come. Will Bitcoin drop further, or are bulls ready to push BTC back above $90,000?
