How Low Can Bitcoin Price Go? Analyzing the Latest Downturn and What’s Ahead

Bitcoin (BTC) has experienced a significant price drop recently, with its value falling by over 6.75% in the past 24 hours. As of February 25, Bitcoin is trading just below $87,800, marking a sharp decline from a high of $96,600 on February 23. This decline has sparked concerns about a deeper correction, particularly as Bitcoin has breached the crucial $90,000 support level—a price point it has held since November 15.

The Breakdown of Support Levels: Is $70,000 Within Reach?

Bitcoin’s drop below the $90,000 mark has led to speculations about the potential for further downside movement, with some analysts predicting a possible dip toward the $70,000 range. As AlphaBTC noted in a post on February 25, if Bitcoin falls further below $90,000, it could test the $80,000 and $70,000 levels.

Founder of MN Capital, Michael van de Poppe, cautioned his followers not to panic, suggesting that Bitcoin may need to “take all the liquidity” below $90,000 before any meaningful reversal occurs. Van de Poppe pointed to the range between $83,000 and $87,000 as a potential “ultimate bottom case” for Bitcoin before it might begin to rotate upward. According to him, the current market sentiment is highly negative, suggesting that this kind of price action is likely.

Moreover, significant liquidity is building in the mid-$80,000 range, which could provide Bitcoin with some support in the short term.

Technical Analysis: Bearish Pattern Suggests Deeper Correction

From a technical perspective, Bitcoin’s recent price action has formed a bear flag pattern, signaling a continuation of the downward momentum unless key support levels hold. On February 24, Bitcoin breached the lower boundary of this pattern at $96,000, further validating the bearish outlook.

If $90,000 fails to hold as support, the next likely level to watch is around $85,000, which represents a 5% decline from its current price.

Should Bitcoin continue its slide, the 200-day Simple Moving Average (SMA) at $81,600 serves as the final line of defense for Bitcoin, providing critical support in this bearish scenario.

Oversold Conditions: A Potential Reversal?

Despite the downward momentum, there are signs of oversold conditions that could indicate a potential reversal. The Relative Strength Index (RSI) for Bitcoin has dropped to 31, entering near oversold territory. Historically, this has been one of the most reliable indicators of a bottom or reversal zone. In fact, Alistair Milne, a well-known crypto investor, pointed out that Bitcoin hasn’t touched oversold conditions on the daily chart since August of last year when it dipped to $49,000.

Milne’s observation suggests that we may be approaching a point where Bitcoin could be due for a bounce, as prices near oversold levels often signal a reversal is imminent.

What’s Next for Bitcoin?

The critical question now is how low Bitcoin's price can go before it finds support and potentially rebounds. With key levels like $90,000 having already been breached and $85,000 in focus, the next few days will be crucial for determining whether Bitcoin can regain its footing or continue to decline.

Traders and investors alike will be watching the $81,600 level closely, as this could serve as the final barrier before a more significant drop. On the other hand, if Bitcoin can stabilize near $85,000 or lower, it may set the stage for a recovery, especially given the oversold conditions that could point to a market rebound in the near future.

As always, volatility is a hallmark of the cryptocurrency market, and Bitcoin’s price fluctuations in the coming weeks will likely be shaped by a mix of technical, macroeconomic, and market sentiment factors. For now, all eyes are on how Bitcoin handles its current price levels and whether it can stabilize or face further downward pressure.