Bitcoin Faces Uncertainty After Breaking $90,000 Support: Will the Price Continue to Drop?

Bitcoin’s price took a significant dip recently, dipping below the crucial $90,000 support level and sparking concerns among traders about its potential for further decline. On February 26, Bitcoin (BTC) briefly touched $89,000 during the early Asian trading hours, following a low of $85,953 on February 25. While the broader market sentiment has shown some improvement, Bitcoin’s rejection from the $89,000 level raises questions about its short-term price outlook.

Subdued Demand and Declining Risk Appetite

A key factor influencing Bitcoin’s price movement is its weakening demand. According to market intelligence firm CryptoQuant, Bitcoin’s “apparent demand” has dropped significantly, reflecting a declining risk appetite among potential investors. Apparent demand is the difference between Bitcoin’s mining issuance (production) and the changes in its inventory (inactive supply for over a year).

When production exceeds the reduction in inventory, it signals that demand for Bitcoin is weak. CryptoQuant’s data shows that Bitcoin’s apparent demand has dropped drastically from 279,000 BTC on December 4, 2024, to just 10,000 BTC on February 26, 2025. On February 25, this metric even turned negative for the first time since September 2024, marking a decline in short-term holder or retail demand. This trend aligns with broader macroeconomic factors, including decreasing liquidity in global markets.

If this subdued demand continues, Bitcoin’s price could experience further downward pressure, much like the market behavior observed between June and July 2024, when Bitcoin dropped 22% to a low of $53,000. However, historically, such periods of reduced demand have often set the stage for strong buying opportunities, as was seen after similar dips in January 2024 and October 2025. During these times, Bitcoin rallied by 76% and 73%, respectively, reaching new all-time highs.

Key Bitcoin Price Levels to Watch

With Bitcoin breaking below the critical $90,000 support level, traders are closely monitoring the next key price levels that could determine its short-term direction.

The first significant support zone for Bitcoin lies between $85,000 and $87,000. The $85,000 mark, formed on November 12, 2024, has historically acted as a strong support level. If Bitcoin loses support at $87,000, traders are likely to focus on the liquidity cluster within this range, which could trigger further selling pressure.

If the bearish trend persists, Bitcoin could potentially test the $80,500 to $85,000 range, which was established during the initial “Trump Pump” rally. The 100-day simple moving average (SMA) also resides in this zone, adding strength to this support level. Notably, the daily CME gap remains between $77,000 and $80,000, which some analysts see as Bitcoin’s worst-case scenario.

The $80,000 Level: A Strong Support Zone

According to CryptoQuant’s Axel Adler Jr., the $80,000 level represents a key support zone for Bitcoin. This level is significant because it reflects a 15% deviation from the short-term holder (STH) cost basis, which currently sits at $91,600. Historically, this cost basis has served as a strong indicator of potential rebounds once Bitcoin’s price touches it. As a result, if Bitcoin’s price drops toward this range, it could trigger renewed buying interest, leading to a possible recovery.

Outlook: Is Bitcoin Heading for a Crash?

While Bitcoin's recent price action has caused some uncertainty, the potential for a further price drop is still very much a possibility. With demand showing signs of weakening and macroeconomic factors exerting downward pressure, Bitcoin may face additional price corrections in the short term. However, as history has shown, periods of reduced demand often lead to lucrative buying opportunities when the market rebounds.

Traders and investors should remain vigilant and monitor these key price levels closely. If Bitcoin can hold above critical support zones like $80,000 and $85,000, it may stabilize and potentially set the stage for a price recovery. However, if these levels fail to hold, a deeper correction toward the $77,000 level remains a real possibility.

In conclusion, while Bitcoin’s price may face short-term challenges, its future remains uncertain. Investors should be prepared for volatility and stay alert to market developments to make informed decisions.