Bitcoin may drop below $90K as bullish momentum weakens
Press Hub UCapital
Share:
Bitcoin's Bullish Momentum Faces Growing Challenges from USD Liquidity, Policy Uncertainty, and Bearish Technical Signals, Threatening the $90-110K Range. While BTC has followed a stairstep bull run since early 2023, three major developments suggest that the next breakout may not materialize as expected.
Tightening USD Liquidity Puts Pressure on Risk Assets
Liquidity is the lifeblood of markets, and recent data suggests tightening USD conditions, which historically weigh on crypto and equities. The Treasury General Account (TGA) balance has surged from $623B to $800B in just four weeks, reducing the availability of excess liquidity in the financial system. With the US debt ceiling hitting $36 trillion, markets had hoped for a liquidity boost from the Treasury, similar to what happened in 2023 when it drained the TGA to keep the government running. However, this time around, liquidity is contracting, which could slow economic activity and increase borrowing costs, leading to reduced risk appetite for assets like Bitcoin.
Trump’s Bitcoin Reserve: From Commitment to Evaluation
The Trump administration’s stance on Bitcoin has been a major driver of BTC’s rally past $100K, particularly due to speculation about a strategic BTC reserve. However, recent statements suggest that the administration is taking a more cautious approach, opting to "evaluate" the feasibility of such a reserve rather than move forward immediately. Market reaction was swift—BTC dropped from $100K to $96K overnight after Trump’s crypto advisor told CNBC that a top priority would be studying the concept of a Bitcoin reserve rather than immediately implementing it. This shift in tone has disappointed investors, raising concerns that Bitcoin’s policy-driven momentum could falter.
Bearish RSI Divergence Resurfaces from 2021
Technical traders are closely watching the 14-week Relative Strength Index (RSI), which is currently flashing a bearish divergence—a pattern that was last seen during Bitcoin’s 2021 bull market peak. Despite Bitcoin hitting higher highs, the RSI has been printing lower highs, suggesting weakening bullish momentum. If this divergence continues, it could signal that Bitcoin’s current rally is losing strength, potentially leading to a deeper correction below $90K.
Market Outlook: Can Bitcoin Hold the $90K Support?
With liquidity tightening, policy uncertainty, and technical warning signs, Bitcoin faces a critical test in the coming weeks. A break below $90K could trigger deeper downside moves, while a strong RSI recovery and clarity on the BTC reserve plan could reignite bullish sentiment. For now, traders are closely watching the $93K-$95K zone, which remains a key support level for Bitcoin’s long-term uptrend.
Tightening USD Liquidity Puts Pressure on Risk Assets
Liquidity is the lifeblood of markets, and recent data suggests tightening USD conditions, which historically weigh on crypto and equities. The Treasury General Account (TGA) balance has surged from $623B to $800B in just four weeks, reducing the availability of excess liquidity in the financial system. With the US debt ceiling hitting $36 trillion, markets had hoped for a liquidity boost from the Treasury, similar to what happened in 2023 when it drained the TGA to keep the government running. However, this time around, liquidity is contracting, which could slow economic activity and increase borrowing costs, leading to reduced risk appetite for assets like Bitcoin.
Trump’s Bitcoin Reserve: From Commitment to Evaluation
The Trump administration’s stance on Bitcoin has been a major driver of BTC’s rally past $100K, particularly due to speculation about a strategic BTC reserve. However, recent statements suggest that the administration is taking a more cautious approach, opting to "evaluate" the feasibility of such a reserve rather than move forward immediately. Market reaction was swift—BTC dropped from $100K to $96K overnight after Trump’s crypto advisor told CNBC that a top priority would be studying the concept of a Bitcoin reserve rather than immediately implementing it. This shift in tone has disappointed investors, raising concerns that Bitcoin’s policy-driven momentum could falter.
Bearish RSI Divergence Resurfaces from 2021
Technical traders are closely watching the 14-week Relative Strength Index (RSI), which is currently flashing a bearish divergence—a pattern that was last seen during Bitcoin’s 2021 bull market peak. Despite Bitcoin hitting higher highs, the RSI has been printing lower highs, suggesting weakening bullish momentum. If this divergence continues, it could signal that Bitcoin’s current rally is losing strength, potentially leading to a deeper correction below $90K.
Market Outlook: Can Bitcoin Hold the $90K Support?
With liquidity tightening, policy uncertainty, and technical warning signs, Bitcoin faces a critical test in the coming weeks. A break below $90K could trigger deeper downside moves, while a strong RSI recovery and clarity on the BTC reserve plan could reignite bullish sentiment. For now, traders are closely watching the $93K-$95K zone, which remains a key support level for Bitcoin’s long-term uptrend.