Bitcoin Faces Internal and External Pressure—Is a Rally Still Possible?

Bitcoin’s price has experienced a significant decline, dropping below $90,000 and hitting levels as low as $87,000. This steep decrease has moved the cryptocurrency further away from its previous all-time high of over $109,000 in January.

The recent sell-off is attributed to a combination of internal and external challenges, creating uncertainty among investors about the future direction of the market. While the market attempts to find support, the path ahead remains unclear.

Mac.D, a contributor to the CryptoQuant QuickTake platform, has analyzed the current market situation and provided a detailed perspective on the potential for a Bitcoin rally.

Internally, the aftermath of a major Ethereum-related hacking incident has unsettled the broader crypto market. Externally, concerns about inflation and the reintroduction of tariff policies under the Trump administration have weighed on risk assets, including Bitcoin.

The recent liquidation of long positions in Bitcoin has reached its highest level since November, with $245 million worth of long positions being liquidated. This could potentially create conditions for a price rebound.

Additionally, whale investors holding Bitcoin for less than six months have an average entry price of around $89,600, serving as a psychological support level that may help stabilize the market if these investors refrain from further selling.

Despite these potential supports, the market outlook remains uncertain. If the support level fails to hold, further declines could occur. In such a scenario, proactive risk management strategies, such as short positions in futures or partial liquidation of holdings, are recommended.

From a technical perspective, Bitcoin’s current price of $87,132 has breached the $89,600 support level highlighted by Mac. While some analysts suggest further declines, others like RektCapital offer a more optimistic view, indicating a potential price recovery following a downside deviation.

Overall, the market remains volatile, and the future direction of Bitcoin’s price is uncertain. Traders and investors are advised to closely monitor market developments and consider implementing risk management strategies to navigate the current market conditions effectively.