In a dramatic market downturn, Bitcoin (BTC) plunged below $91,200 on February 3, marking its lowest point in 20 days amid growing economic concerns and market turbulence.
The sharp decline comes as former U.S. President Donald Trump's aggressive trade policies targeting China, Mexico, and Canada send shockwaves through financial markets. As American consumers prepare for potential inflation by stockpiling goods, retail investors are moving away from cryptocurrencies and other risk assets.
The crypto market witnessed massive liquidations exceeding $1.8 billion as Bitcoin's price dropped 7% in just 24 hours. This unusually heavy selling suggests large institutional investors are repositioning their portfolios in anticipation of potential U.S. Federal Reserve interest rate hikes.
Market data reveals a strong bearish sentiment, with short positions of $11.9 billion substantially outweighing long positions of $3.04 billion. However, a concentration of $2.12 billion in leveraged long positions at the $90,358 level indicates substantial support at that price point.
Despite the current downturn, technical analysts point to a double-bottom pattern that could signal a potential recovery. If market sentiment improves, Bitcoin could target the $108,000 level. Key support levels to watch include $90,500, $93,000, and $94,300.
The cryptocurrency's decline coincides with reports that sovereign entities, including the Czech Republic and Bhutan, are exploring Bitcoin acquisitions as an inflation hedge. This institutional interest, combined with technical indicators, suggests the possibility of a price rebound if market conditions stabilize.
For Bitcoin to regain bullish momentum, it must maintain support above $90,500 and overcome resistance levels at $105,800 and $108,000. The market continues to watch how global economic uncertainties and institutional participation will shape Bitcoin's price trajectory in the coming weeks.