Bitcoin Price Analysis: Why Did BTC Fall Under $90,000 on Monday?

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Bitcoin (BTC) experienced significant selling pressure in mid-January 2025, briefly dipping below $90,000 for the first time since November 2024.

Bitcoin Price Analysis: Why Did BTC Fall Under $90,000 on Monday?
Bitcoin price analysis

The leading cryptocurrency has retreated about 15% from its all-time high of $108,000, primarily driven by shifting macroeconomic sentiment and concerns about U.S. monetary policy.

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Macroeconomic Headwinds Impact the Crypto Market

The current retreat follows more general market concern resulting from stronger-than-expected U.S. job data, which has caused significant investment banks to change their Federal Reserve rate drop projections. Goldman Sachs now forecasts just two rate cuts in 2025, while Bank of America warns of possible rate increases. This change in monetary policy perspective has boosted the U.S. dollar and driven 10-year Treasury rates to their highest points since late 2023.

Institutional Activity Remains Strong

Institutional interest in Bitcoin is strong even with price corrections. Following the successful debut of its U.S. spot Bitcoin ETF (IBIT) in January 2024, BlackRock has introduced a new Bitcoin ETF on Cboe Canada, so broadening its cryptocurrency offers. Semler Scientific adds 237 BTC to its treasury for around $23 million, therefore increasing its total holdings to 2,321 BTC as corporate adoption keeps rising.

Political Catalyst: The Trump Effect

Market analysts—including Pantera Capital—suggest that the forthcoming inauguration of President-elect Donald Trump would act as a positive stimulus for Bitcoin BTC/USD. Trump’s pro-crypto posture and selections of blockchain-friendly individuals like Paul Atkins to the SEC and David Sacks as AI and crypto czar have raised hope in the regulatory scene.

BTC/USD Technical Analysis

BTC/USD

 

Mixed indications show on the derivatives market. With an annualized premium of 11%, slightly over the neutral range of 5–10%, Bitcoin’s futures reflect cautious hope among traders. Following a little negative surge during the current sell-off, the funding rate for perpetual futures contracts has settled around 0.5% monthly.

Since November, key support levels have developed around the $90,000-$92,000 zone, which has function as a floor. The recent liquidation of $107 million in leveraged long bets points to possible over-leverage in the market that has to be flushed.

Bitcoin Price Outlook

Although macroeconomic headwinds still affect short-term market movement, especially with regard to interest rate expectations and world economic concerns, the long-term picture seems positive. Though current pricing indicate this objective may be cautious, analysts at Bernstein keep their projection of Bitcoin trading in the $80,000-$90,000 region by Inauguration Day.

Market participants should remain mindful of several key risks:

  • Potential delays in expected Federal Reserve rate cuts
  • Global economic slowdown concerns
  • Regulatory developments under the incoming administration
  • Market impact of large-scale Bitcoin sales from government seizures

The December CPI report due January 15, the presidential inauguration, and ongoing institutional fund flows into Bitcoin ETFs—which have already shown notable momentum with over $35 billion in total net inflows during their first year of trading—are the next main price catalysts to monitor.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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