Bitcoin Plunges Below $87,000: Market Experts Warn of Further Decline Amid Economic Uncertainty

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Bitcoin's price tumbled below $87,000 on Tuesday, marking a steep 20% decline from its all-time high of $109,000 reached just last month. The sharp downturn comes amid growing economic uncertainties and a broader cryptocurrency market sell-off.

The leading cryptocurrency's price drop appears driven by mounting concerns over U.S. economic factors, particularly inflation risks and trade policy developments. President Trump's recent confirmation of planned tariffs on Mexico and Canada has heightened market anxiety. Investors are closely monitoring Friday's upcoming Personal Consumption Expenditures (PCE) data, following January's higher-than-expected Consumer Price Index readings.

Market experts advise caution before buying into the current dip. Standard Chartered's Head of Digital Assets Research, Geoff Kendrick, predicts bitcoin could fall further into the low $80,000s. The analyst suggests waiting for a major ETF outflow day - around $1 billion - before considering new positions.

Recent data shows investors are already pulling back, with spot bitcoin ETFs recording net outflows of $539 million on Monday - the second-highest daily outflow in 2025. Despite the current bearish sentiment, some analysts maintain optimistic longer-term outlooks, with predictions of bitcoin reaching $200,000 by year-end.

The broader crypto market faces additional pressure from the apparent collapse of the memecoin trend, particularly in the Solana ecosystem. Popular tokens like Melania, Libra, and Trump have seen substantial losses, with some dropping over 20% in 24 hours. Bitwise CIO Matt Hougan suggests the memecoin phenomenon could completely unravel within six months.

While near-term headwinds persist, the market's response to economic data and institutional investment flows will likely determine bitcoin's price trajectory in the coming months.