Key Insights:
Bitcoin saw a crash to $82k yesterday. Its price saw a successive breakdown of multiple supports at $95k, $91k, and $85k.
Factors that had caused the breakout were low liquidity, ETF redemptions, and excessive shorts in the market.
However, long-term price goals are still intact, with VanEck seeing a $150k price tag by 2025 and $3 million by 2050.
Short-term recovery could see Bitcoin above $90k by this weekend.
Bitcoin's price saw a major crash in the last 24 hours. After breaching the $95k support levels from the upside, Bitcoin price saw a decline till $92, which too was broken under excessive selling pressure. Further, the price even broke down the next support level of $85k and fell till $82,131. At press time, Bitcoin has recovered its $85k support levels and has been trading at the $85.2k level.
Bitcoin's Price Trend in the Last 24 Hours
CoinMarketCap
Several factors pushed Bitcoin down from $100k levels to $80k within a week. The factors that had the most negative impact were stagnating price, lack of liquidity, excessive shorts in the markets, fear of recession in the crypto markets, and imbalance in ETF holdings.
Bitcoin's price saw a stagnation between $95k and $98k. The day before yesterday, the price saw an attempt to cross $100k, which failed. Seeing it as an opportunity, derivatives markets shorted Bitcoin from these levels. Excessive shorts crashed the price below $95k support, eventually breaking $91k and then $85k support levels too.
Bitcoin Open Interest Data Reveals Excessive Shorts via Call Options (Green Candles)
Coinglass
Another major factor that caused liquidations in the markets was the short-term ETF holdings. It was recently revealed that as large as 56% of all ETF purchases were for speculation and only the rest (44%) were the real investments. These speculative ETF holders withdrew their investments once the markets saw the possibility of a short-term fall below $100k. As a result, the markets saw a second order selling.
Bitcoin ETFs Saw Accelerated Withdrawals Since 18 Feb 2025
Coinglass
Bitcoin ETFs were selling their BTC investments in large numbers since 18 Feb 2025.
Undoubtedly, the current fall is not the end of times; rather it is just a correction that was long due. The liquidity crisis had this fall coming since early January 2025.
In the next few months, we might see more withdrawals till the US National Digital Asset Stockpile starts buying Bitcoin. This event is only expected to take place after the White House AI and Crypto Working Group under David Sacks presents its report to the President around mid-2025.
More buying in Bitcoin could also happen from institutions and governments, which were happy buying Bitcoin at $100k levels. Clearly, many would see the current price of $85k as more attractive. These companies and funds include sovereign funds, Bitcoin (or crypto) wealth managers, private equity and technology players like MicroStrategy, Metaplanet, Riot Platforms, and high net worth investors.
In the short-term, we also have new players like GameStop that have been exploring investment opportunities in Bitcoin and crypto. GameStop was the company that had given birth to the memecoin rally in the crypto markets. It was the GameStop stock, which was bought by fans and supporters to prevent its collapse due to excessive market shorts.
After taking support at $85k levels, Bitcoin's price has recovered rapidly from $82k yesterday to $86k at press time. This support comes mainly from the buyers who accumulate BTC at lower levels.
Bitcoin USDT 1D Charts
Tradingview
Bitcoin's 1D charts shown above clearly shows that the worst has already passed, and BTC could see a gradual recovery above $90k within this week. As soon as $90k levels are crossed, we could see another attempt to $95k levels by early or mid-March 2025.
According to VanEck experts, Bitcoin could see a price between $150k to $180k by the end of 2025. By the year 2050, VanEck sees a price of $3 million per Bitcoin.
ArkInvest CEO Cathie Wood, on the other hand, has also been expecting a price of $1 to $1.5 million per BTC in the next 5 years.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.