Bitcoin price risks drop to $90,000 as Fed comments fuel market uncertainty
Bitcoin's recent price action reflects a continued downtrend, with the cryptocurrency declining to a five-day low of $95,300 on Monday.
This aligns with its broader bearish movement since last month. Today, Tuesday, February 18, Bitcoin has been trading between $96,400 and $95,550 in the Asian session before trading at $95,670 in the European session, marking a 1.7% decline for the week.
Technical indicators reinforce the bearish sentiment. The RSI on the daily chart has remained in bearish territory throughout the month, suggesting that sellers continue to dominate the market. If the downtrend persists, the 100-day EMA at $94,000 could provide support. However, a break below this level could expose Bitcoin to further downside, potentially testing the $90,000 psychological threshold.
Bitcoin price dynamics (January 2025). Source: TradingView.
Institutional outflows signal shifting sentiment in Bitcoin markets
Macroeconomic factors have also played a role in Bitcoin’s downturn. After 19 consecutive weeks of inflows following the U.S. election, Bitcoin investment trends have reversed sharply, recording $430 million in outflows. Interestingly, short-Bitcoin products also experienced $9.6 million in outflows, indicating that investors are not significantly positioning for further downside.
The reversal in investment flows coincided with concerns over tighter monetary policy. Federal Reserve Chair Jerome Powell’s recent remarks, combined with inflation data that exceeded expectations, have heightened uncertainty in financial markets. As Bitcoin is particularly sensitive to interest rate expectations, these developments have weighed on sentiment, prompting institutional outflows.
Moving forward, Bitcoin's price action will likely hinge on broader market conditions and technical levels. A rebound above $96,400 could signal an attempt to stabilize, while a sustained break below $94,000 may accelerate selling pressure toward $90,000. Investors will also monitor macroeconomic data and Federal Reserve commentary for further clues on risk sentiment.
On-chain data indicates that approximately 1.6 million addresses acquired 1.57 million BTC. Historically, this could introduce strong selling pressure should Bitcoin attempt another rally.
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