Why Is Bitcoin Going Down? BTC Price Falls to Lowest Levels

Why Is Bitcoin Going Down? BTC Price Falls to Lowest Levels Since November

Bitcoin drops to $91,200 amid strong US economic data. Fed rate cut hopes diminish as the dollar strengthens.
Analysts maintain a bullish outlook despite correction. Standard Chartered predicts $200K by 2025 end.
Technical analysis shows that Bitcoin bulls are still in charge and the BTC price may rebound.
Bitcoin has experienced a significant decline this week, with the cryptocurrency dropping from its recent high above $100,000 to around $91,200. This sharp downturn has sent ripples through the entire crypto market, triggering substantial liquidations and traders uncertainty.

Let’s check why Bitcoin is going down and analyze if BTC price can rebound in the coming days and weeks.

Why Is Bitcoin Falling? BTC Price Declined Three Days In a Row
Bitcoin’s price during the Friday session on January 10, 2025, halted at a local support zone, ending a three-day decline after briefly rebounding above the psychological $100,000 mark.

From a technical perspective, concerns arise as the price dropped below the 50-day exponential moving average. However, the current levels align with the local lows formed during the consolidation phase observed since mid-November.

Alongside Bitcoin, other major cryptocurrencies also experienced losses, with similar downward trends noted in XRP and Cardano.
“There is a rumor that the recent market dump was initiated after the Department of Justice (DoJ) began selling some of its Silk Road Bitcoin holdings. One of the suspected wallet IDs has been identified,” Paul Howard, Senior Director at Wincent, commented for Finance Magnates. “As mentioned previously, this month is expected to be volatile, particularly as we approach January 20th, the inauguration date for President Trump. Volatility, however, creates opportunities for trading.”

At the time of writing, Bitcoin changes hands at $94,300, rebounding from the local lows.
Let’s examine the factors behind the recent decline in Bitcoin and other cryptocurrencies.

Market Impact and Economic Factors
The primary catalyst for this decline has been stronger-than-expected U.S. economic data, particularly in the services sector and labor market. This robust economic performance has diminished hopes for aggressive Federal Reserve rate cuts in 2025, leading to a spike in Treasury yields and a strengthening U.S. dollar.

The market reaction has been severe, with over $390 million in total crypto liquidations occurring in the last 24 hours, of which approximately $54 million was specifically in Bitcoin positions.
Government and Institutional Factors
Adding to the selling pressure is the U.S. government’s planned liquidation of 69,370 Bitcoins seized from the Silk Road marketplace. This substantial amount, valued at approximately $6.5 billion, is scheduled for sale through the U.S. Marshals Service, creating additional market uncertainty. Furthermore, institutional sentiment has weakened, with significant ETF outflows and declining confidence among major investors.

Bitcoin Technical Analysis and Market Outlook
Looking at Bitcoin from a technical perspective, we see that the price is currently utilizing the lower boundary of the consolidation channel formed since mid-November. Although it has dropped below the previously mentioned 50-day EMA, this should not cause concern for bulls and buyers. As long as the sideways channel between the $91,000 support and the nearly $108,000 resistance remains intact, bears are likely to stay on the sidelines.

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