Bitcoin (BTC) dropped below the $95,000 mark on Monday, with traders now eyeing a possible slide toward $90,000 or lower. The pullback comes as the market braces for the Federal Reserve’s upcoming meeting, where policymakers are widely expected to leave interest rates unchanged. However, traders are anticipating any commentary on future rate cuts or adjustments to the economic outlook.
Bitcoin’s decline follows a robust two-week rally that saw the cryptocurrency briefly surpass $98,000, attracting both retail traders and institutional investors. However, the recent uptick now appears to be losing steam, with a combination of technical resistance and growing macroeconomic uncertainty weighing on the market.
Resistance Levels and Bearish Predictions
“We’ve hit a significant resistance zone that previously served as support between December and February,” explained Alex Kuptsikevich, a senior analyst at FxPro, in an email to CoinDesk. He suggested that the next major downside targets for Bitcoin could be $92,500 and $89,000. “If Bitcoin breaks below $90,000, it could signal further weakness, pushing the price below its 200-day moving average, which would be a critical technical level,” he said.
Focus on the Fed and Trade Negotiations
The broader macroeconomic environment is also influencing Bitcoin’s price action. Traders are closely monitoring ongoing trade negotiations between the U.S. and China, as developments in these talks could impact inflation and market sentiment.
While the Federal Reserve is expected to keep rates steady on Wednesday, its stance on future interest rate cuts will be a key focus. QCP Capital noted that the current economic data, combined with hopes of reducing trade tensions, has helped market sentiment rebound. However, they cautioned that trade risks remain a significant concern for both traditional and digital assets.
Bitcoin ETFs Attract Record Inflows Despite Price Volatility
While Bitcoin’s price has been retreating, Bitcoin spot ETFs have continued to draw in strong investor interest. According to SoSoValue, net inflows into Bitcoin ETFs last week totaled $1.81 billion. This suggests that institutional and retail investors are still seeking exposure to Bitcoin, despite the recent pullback.
However, on-chain data from Glassnode shows that long-term Bitcoin holders (LTHs) are now sitting on nearly 350% in unrealized gains, a level that often signals upcoming profit-taking. “As Bitcoin nears the $99,900 price point, we expect more selling pressure from LTHs, which could require substantial demand to absorb the potential outflows,” Glassnode highlighted.
Resurgence of Meme Coins and Shifting Sentiment
Meme coin activity has also picked up in recent weeks, according to Santiment. The data suggests that traders are returning to high-risk, speculative bets, shifting away from safer, more stable investments like Bitcoin and ETFs. However, this renewed interest in meme coins has not translated into widespread gains. For example, GORK, a meme coin linked to an AI chatbot parody account recently mentioned by Elon Musk, failed to extend its rally, signaling that celebrity-driven asset pumps may be losing traction in the current market climate.
As Bitcoin navigates this period of uncertainty, traders are focusing on both the upcoming Federal Reserve meeting and developments in global trade. The market remains on edge, with the possibility of heightened volatility in the days ahead, depending on the outcomes of these key events.
