Bitcoin Price Analysis: BTC Slips Below $90,000 As Leveraged Liquidations Rock Market
Bitcoin (BTC) slipped below $90,000 after $200 million in leveraged liquidations left the crypto market reeling. Analysts have warned the flagship cryptocurrency could see an extended decline if bulls fail to defend the $84,000 level.
BTC is down over 2% in the past 24 hours, trading around $89,535. The downturn has wiped out over $100 billion from the total market cap.
Strategy’s Cash Reserve To Assuage Investor Fears
Strategy CEO Phong Le has said the company created the $1.44 billion cash reserve to quell investor anxiety over whether the firm could meet its dividend and debt obligations if market conditions worsened. Le added that the reserve was created in just over a week, demonstrating that Strategy could still attract capital without selling its Bitcoin holdings.
“We’re very much a part of the crypto ecosystem and Bitcoin ecosystem. Which is why we decided a couple of weeks ago to start raising capital and putting US dollars on our balance sheet to get rid of this FUD.”
The reserve was announced on Monday and was funded via a stock sale. The company believes it can secure at least 12 months of dividend payments, and plans to stretch its buffer to 24 months. The reserve gives the company much-needed breathing room without dipping into its holdings during a difficult market period. Concerns around Strategy amplified in recent weeks as Bitcoin struggled to regain momentum after retreating from recent highs. While Le acknowledged market concerns, he revealed that Strategy was never going to have an issue paying dividends, stating,
“We weren’t going to have an issue paying dividends, and we weren’t likely going to have to tap into selling our Bitcoin. But there was FUD that was put out there that we wouldn’t be able to meet our dividend obligations, which causes people to pile into a short Bitcoin bet.”
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) slumped below $90,000 after a wave of liquidations left the crypto market reeling. Analysts have warned that the flagship cryptocurrency could slip into a bear market if bulls fail to defend the $84,000 level. Volatility returned to the market after over $200 million in leveraged positions were liquidated after an options expiry event. According to available data, $3.35 billion in Bitcoin options with a max pain point at $91,000 expired on Friday, along with $668 million of ETH options.
“BREAKING: Crypto liquidations have resumed, sending Bitcoin back below $90,000. Over the last 4 hours, more than $200 million in leveraged positions have been wiped out. Volatility is back.”
Prominent analyst TraderThanos believes the market is tilting into bear market territory, stating in a post on X,
“Maybe we get another retest of 93k-93.2k. That would align more perfectly with my current bias. The next leg down takes us to 76k.”
Analysts believe BTC must hold on to the $84,000 support level. However, if it fails to rebound from this level, the downtrend could take the price below $80,000, potentially as low as $75,000.
Meanwhile, the Bureau of Economic Analysis released its long-awaited and delayed September PCE inflation data. The data revealed headline PCE at 2.8% year-over-year, matching analyst expectations. Meanwhile, Core PCE, the Fed’s preferred inflation gauge, improved to 2.8%, beating the forecasted 2.9%. Core PCE declining is an encouraging sign, even as inflation remains above the Fed’s 2% target. The Fed is staring at conflicting signals: inflation is cooling, but employment is showing resilience.
BTC’s price action has largely been bearish over the past few days. The flagship cryptocurrency ended the previous weekend in the red, dropping 0.50% to $90.369 on Sunday. Selling pressure intensified on Monday as the price fell to an intraday low of $83,800 before settling at $86,282, ultimately dropping 4.52%. Despite the overwhelming selling pressure, BTC recovered on Tuesday, rising nearly 6% to reclaim $90,000 and settle at $91,308.
Source: TradingView
Buyers retained control on Wednesday as BTC rose 2.35% to $93,453. However, it lost momentum on Thursday, dropping 1.46% to $92,093. Bearish sentiment intensified on Friday as the price fell nearly 3$, slipping below $90,000 to $89,345. BTC is marginally up during the ongoing session, trading around $89,633.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.