Bitcoin’s 25% Drop from ATH Could Deepen, Analysts Warn

Bitcoin’s ongoing price decline, which has seen a 25% drop from its all-time high (ATH) of $108,786 on January 20, 2025, has raised concerns among analysts, signaling that the worst may not yet be over for the cryptocurrency. The latest figures show that Bitcoin is experiencing its second-worst February on record, largely attributed to the combined impact of macroeconomic pressures and a technical correction that has taken hold of the market.

The downward pressure on Bitcoin’s price comes amid a broader risk-off sentiment among investors, spurred by macroeconomic concerns and key inflation data that has steered the market into a defensive mode. Although the U.S. Core Personal Consumption Expenditures (PCE) price index—an important inflation measure—came in line with analysts’ expectations, showing a drop from 2.9% to 2.6% year-over-year, Bitcoin’s price has only seen a modest uptick, rising briefly to $81,800 before falling to a three-month low of $78,400. The market’s reaction to this data highlights the ongoing bearish sentiment and market caution, despite relatively stable inflation figures.

This correction is the first significant one Bitcoin has faced since reaching its ATH less than six weeks ago. Experts have noted that the correction, while largely technical in nature, has been worsened by external macroeconomic factors. Notably, the threat of tariffs and potential trade wars, particularly stemming from geopolitical tensions such as former U.S. President Donald Trump’s trade policies, have added an extra layer of uncertainty to the market, further discouraging risk-taking among investors.

Looking at Bitcoin’s price chart from a technical analysis perspective, the key support levels are under intense scrutiny. Analysts have pointed out that if Bitcoin’s price fails to hold the 3-month Simple Moving Average (SMA) support around $71,880, and does not bounce back toward the $80,000 range, the outlook could become less favorable. In this scenario, Bitcoin could face a deeper and prolonged decline. The technical indicators suggest that a failure to hold the support levels could signal more bearish action and a possible price fall toward the $60,000 region.

Standard Chartered, a global financial services company, has shared a similar cautious outlook for Bitcoin. Their analysts predict that Bitcoin could retest the $69,000 level by early March. This outlook is supported by on-chain data from IntoTheBlock, which shows significant accumulation of Bitcoin between the $60,000 and $72,000 price range. According to the data, over six million Bitcoin addresses have acquired a total of 2.64 million BTC within this price range. This accumulation could provide some support and prevent Bitcoin from falling below these levels, at least in the short term.

Despite the recent decline, many analysts remain bullish in the long term, believing that Bitcoin’s fundamentals are strong and that its current price dip could be an opportunity for long-term investors to accumulate. However, in the immediate term, Bitcoin may continue to face volatility as it tests key support zones, with the potential for further downside if the broader market conditions remain unfavorable or if Bitcoin fails to maintain its position above the critical $71,880 level.

In conclusion, while Bitcoin has seen a considerable decline since its all-time high, the market is still grappling with macroeconomic factors, geopolitical tensions, and technical signals that suggest further volatility could be ahead. Investors should remain cautious, as Bitcoin’s price could continue to test lower support levels before finding its footing again.