Bitcoin Price Prediction: Market Faces Sea of Red, Projected Drop to $80K

The cryptocurrency market is currently experiencing a significant downturn, with Bitcoin trading at three-month lows below $88,000 and the CoinDesk 20 Index plummeting over 10% in just 24 hours. Several factors are contributing to this decline, including a risk-averse attitude in traditional financial markets and the impact of memecoins, notably the recent trading activity surrounding TRUMP and LIBRA.

Factors Influencing Market Decline

As we noted earlier this week, market makers at the Consensus Hong Kong conference expressed concerns that the recent surge in memecoin trading has drained liquidity from more productive sectors within the cryptocurrency space, leaving the overall market exposed to volatility.

Another contributing factor is the lack of action from former President Donald Trump. Despite making substantial promises leading up to the elections, tangible measures have been notably absent. The anticipated establishment of a Bitcoin Strategic Reserve has yet to materialize, and even efforts to create state-level reserves are proving to be challenging. "The industry continues to await a concrete manifestation of these plans, such as the proposed Bitcoin Strategic Reserve," remarked Petr Kozyakov, co-founder and CEO of Mercuryo. "In the interim, market sentiment has been adversely affected by the largest hack in Bybit’s history, which resulted in the loss of 401,000 ETH, along with the ongoing issues within the memecoin sector marked by high-profile pump-and-dump schemes."

Economic Concerns Weighing on Cryptocurrency

Additionally, renewed fears surrounding the U.S. economy are dampening appetite for riskier investments. "Concerns regarding a slowdown in U.S. economic growth have emerged following last week’s Services PMI report, which recorded its lowest level in 22 months and aligns with a GDP growth estimate of only 0.6%," stated Aurelie Barthere, principal research analyst at Nansen. "Moreover, our Nansen Risk Barometer has shifted from Neutral to Risk-off today."

These factors combined have caused Bitcoin to break free from its two-month trading range of $90,000 to $110,000. Technical analysis suggests that it could potentially decline to $70,000, although the highest open interest in Bitcoin put options on Deribit is centered around the $80,000 mark, indicating that this level may offer some support.

Potential Stabilizing Factors

What could help stabilize the market? An announcement from Trump regarding a strategic reserve or a reversal in the Nasdaq 100 could provide some relief. However, the Nasdaq has dropped below its 50-day simple moving average, and the Japanese yen—a traditional risk-averse indicator—continues to strengthen against G7 currencies, including the U.S. dollar.

The next significant events to watch for risk assets include Nvidia’s earnings report scheduled for February 26 and core PCE inflation figures set to be released on February 28.

Upcoming Economic Indicators

Crypto: Macro

Feb. 25, 10:00 a.m.: The Conference Board releases February’s Consumer Confidence Index, with an estimate of 102.5 compared to a previous 104.1.
Feb. 25, 1:00 p.m.: Richmond Fed President Tom Barkin will speak on “Inflation Then and Now.”
Feb. 25, 7:30 p.m.: The Australian Bureau of Statistics will release January’s Consumer Price Index, with a monthly CPI indicator estimated at 2.6% versus a previous 2.5%.
Feb. 26, 10:00 a.m.: The U.S. Census Bureau will release January’s New Residential Sales report, estimating 0.68 million new home sales compared to previous sales of 0.698 million.
Feb. 26-27: The first G20 meeting of finance ministers and central bank governors for 2025 will take place in Cape Town.

Earnings Reports

Feb. 25: Bitdeer Technologies Group (BTDR) is expected to report -$0.17 pre-market.
Feb. 25: Cipher Mining (CIFR) is projected to report -$0.09 pre-market.
Feb. 26: MARA Holdings (MARA) is expected to report -$0.13 post-market.
Feb. 26: NVIDIA (NVDA) is also scheduled to report post-market.

Token Events and Governance Votes

Ampleforth DAO is currently voting on reducing the Flash Mint fee to 0.5% and the Flash Redeem fee to 5% to enhance system adaptability. Meanwhile, DYdX DAO is considering the initiation of a buyback program, proposing to allocate 25% of the protocol’s net revenue for this purpose. Frax DAO is discussing various protocol upgrades, including renaming FXS to FRAX, implementing the Frax North Star Hardfork, and introducing a Tail Emission Plan with reducing emissions.

Unlocking Events

Feb. 28: Optimism (OP) will unlock 2.32% of its circulating supply, valued at approximately $30.21 million.
Mar. 1: DYdX will unlock 1.14% of its circulating supply, worth about $5.36 million.
Mar. 1: ZetaChain (ZETA) will unlock 6.48% of its circulating supply, valued at $11.86 million.
Mar. 1: Sui (SUI) will unlock 0.74% of its circulating supply, estimated at $61.32 million.
Mar. 7: Kaspa (KAS) will unlock 0.63% of its circulating supply, worth around $14.02 million.
Mar. 8: Berachain (BERA) will unlock 9.28% of its circulating supply, valued at $61.6 million.
Mar. 12: Aptos (APT) will unlock 1.93% of its circulating supply, worth approximately $69.89 million.

Token Listings

Feb. 25: Zoo (ZOO) will be listed on KuCoin.
Feb. 25: Ethena (ENA) will be listed on Bithumb.
Feb. 26: Moonwell (WELL) will be listed on Kraken.
Feb. 27: Venice token (VVV) will be listed on Kraken.
Feb. 28: Worldcoin (WLD) is set to be listed on Kraken.

Token Talk

A memecoin linked to a counterfeit Sam Bankman-Fried account emerged as a notable scam of the day. The deception began with the account "Comune Guardiagrele," a small Italian city that had a verified grey checkmark, indicating it was an official account. Scammers managed to hijack or purchase this account, changing its name to "@SBF_Doge," imitating the notorious crypto figure jailed for his role in the FTX fraud. They then launched a memecoin, potentially misleading traders into believing it was legitimate due to the verification badge. The memecoin’s market cap soared to $10 million before the creators pulled liquidity, causing its value to plummet to $100,000, allowing them to pocket the proceeds.

Market Positioning and Sentiment

Among the top 25 cryptocurrencies by market capitalization, excluding stablecoins, all have reported losses in the past 24 hours. Additionally, many have experienced increases in open interest for perpetual futures, alongside negative cumulative volume deltas, suggesting a rise in bearish positions. This could indicate that further declines may be imminent. On Deribit, XRP’s February expiry puts are trading at an 8 vol premium compared to calls, reflecting a notably bearish sentiment. Both Bitcoin and Ethereum options display concerns about downward movement until mid-to-late March, while subsequent expirations maintain a bullish outlook.

Market Movements

Bitcoin (BTC) is currently down 6.23% from 4 p.m. ET on Monday, trading at $88,118.16, with a 24-hour change of -7.7%.
Ethereum (ETH) has dropped 9.4% to $2,393.03, with a 24-hour decline of -10.6%.
The CoinDesk 20 Index is down 9.19% at 2,750.01, reflecting a 24-hour decrease of -11.61%.
The Ether CESR Composite Staking Rate remains unchanged at 2.99%.
The BTC funding rate on Binance is at 0.0008%, equivalent to an annualized rate of 0.84%.
The DXY index is stable at 106.7.
Gold prices have fallen 0.28% to $2,937.90 per ounce, while silver is down 0.43% at $32.14 per ounce.
The Nikkei 225 index closed down 1.39% at 38,237.79, and the Hang Seng index dropped 1.32% to 23,034.02.
The FTSE index increased by 0.34% to 8,688.48, while Euro Stoxx 50 remained unchanged at 5,449.69.
The DJIA ended Monday flat at 43,461.21, while the S&P 500 decreased by 0.5% to 5,983.25.
The Nasdaq index fell by 1.21% to 19,286.93, and the S&P/TSX Composite Index closed unchanged at 25,151.26.
The S&P 40 Latin America index decreased by 0.92% to 2,386.34. The U.S. 10-year Treasury rate fell by 6 basis points to 4.35%.
E-mini S&P 500 futures are down 0.78% at 5,981.75, while E-mini Nasdaq-100 futures are down 0.53% at 21,306.25. E-mini Dow Jones Industrial Average Index futures are down 0.13% at 43,479.00.

Bitcoin Statistics

Bitcoin Dominance: 61.81% (-0.15%)
Ethereum to Bitcoin ratio: 0.02720 (-0.95%)
Hashrate (seven-day moving average): 745 EH/s
Hashprice (spot): $56.8
Total Fees: 7.5 BTC / $1.3 million
CME Futures Open Interest: 166,510 BTC
Bitcoin priced in gold: 29.7 oz
Bitcoin vs gold market cap: 8.42%

Technical Analysis

According to Bitcoin’s daily chart, the cryptocurrency has formed a double top bearish reversal pattern, suggesting a potential trend shift that may lead to prolonged weakness towards the 200-day simple moving average, currently positioned below $82,000.

Crypto Equities

MicroStrategy (MSTR) closed Monday at $282.76, down 5.65%, with a pre-market decline of 6.35% to $264.81.
Coinbase Global (COIN) finished at $227.07, down 3.53%, with a pre-market drop of 5.6% to $214.14.
Galaxy Digital Holdings (GLXY) ended at C$21.80, down 4.22%.
MARA Holdings (MARA) closed at $13.25, down 4.68%, with a pre-market decline of 5.76% to $13.09.
Riot Platforms (RIOT) finished at $9.99, down 4.49%, with a pre-market drop of 5.01% to $9.49.
Core Scientific (CORZ) closed at $9.86, down 8.7%, with a pre-market decline of 5.58% to $9.31.
CleanSpark (CLSK) ended at $8.90, down 3.78%, with a pre-market drop of 5.39% to $8.42.
CoinShares Valkyrie Bitcoin Miners ETF (WGMI) closed at $19.20, down 6.43%, with a pre-market decline of 5.21% to $18.20.
Semler Scientific (SMLR) closed at $44.38, down 7.04%, with a pre-market drop of 1.8% to $43.58.
Exodus Movement (EXOD) finished at $41.16, down 13.91%, remaining unchanged in pre-market trading.

ETF Flows

Spot BTC ETFs:

Daily net flow: -$516.4 million
Cumulative net flows: $39.05 billion
Total Bitcoin holdings: approximately 1,105 million.

Spot ETH ETFs:

Daily net flow: -$78 million
Cumulative net flows: $3.07 billion
Total Ethereum holdings: approximately 3.331 million.

Overnight Flows

Raydium, a decentralized exchange based on Solana, recorded a daily trading volume of $1.9 billion on Monday, marking the lowest figure since November 29. This decline partly explains the recent decrease in the values of the RAY token and Solana’s SOL token.

Market Recap

Bitcoin has dipped below the $89,000 mark, reaching a three-month low as Nasdaq futures indicate further tech sector losses, while a strengthening yen raises concerns about risk aversion reminiscent of August 2024. U.S.-listed Bitcoin ETFs have experienced their second-largest outflows of the year, totaling $516 million, as the Bitcoin CME annualized basis has dropped to 4%, its lowest since the launch of these ETFs in January 2024. Ethena Labs has enhanced the risk management of its USDe stablecoin by integrating Chaos Labs’ Edge Proof of Reserves Oracles. Meanwhile, European markets are seeing a resurgence, with record inflows and calls for regulatory reform, contrasting with the U.S. markets.