More Losses Expected for Bitcoin, but Long-Term Bullish Signals Are Appearing

Bitcoin Plunges to $87K as Market Chaos Deepens, But Macro Trends Could Fuel Next Rally

The outlook for interest rates has turned notably dovish in recent weeks, offering a potential catalyst for bitcoin’s next move higher.

Bitcoin Slides 20% Amid Broader Crypto Sell-Off

Bitcoin (BTC) has fallen sharply, dropping over 20% from its all-time high of $109,000 set just five weeks ago. On Tuesday, the leading cryptocurrency touched a low of $87,000 as market-wide turbulence intensified.

Many bitcoin investors are pointing fingers at the broader crypto sector, which has seen a wave of volatility. The January market peak coincided with a speculative surge in memecoins, driven in part by enthusiasm surrounding the Trump administration. However, the hype collapsed after poorly timed launches of Trump- and Melania-branded tokens, which skyrocketed before crashing and leaving retail investors with steep losses.

Solana (SOL), the blockchain underpinning much of the memecoin craze, has been hit the hardest—tumbling over 50% since that January weekend and leading the decline among major cryptocurrencies.

Bybit Hack Adds to Market Jitters

Despite the chaos, bitcoin had managed to hold steady, trading in a tight range and even making a run toward $100,000 just days ago. That momentum was abruptly halted by a major security breach at crypto exchange Bybit.

While the hack itself had no direct impact on Bitcoin’s network, it reignited concerns over security in the crypto space, triggering a sharp sell-off. Ethereum (ETH) has plummeted 15% since the exploit, with panic selling spreading across the market and pulling BTC lower.

Analysts Warn of Further Downside Before a Rebound

Even bitcoin bulls are urging caution in the short term.

“Our expectations were much higher than $108,000, so we don’t want to believe we’ve already topped,” wrote well-known analyst StackHodler on X. “But the reality is, no one can say for sure. We’ve now dropped below the short-term holder realized price of $92,000, and a test of the 200-day moving average at $82,000 may be necessary.”

Standard Chartered’s Geoff Kendrick, who has projected BTC reaching $200,000 this year, echoed similar caution:

“DO NOT buy the dip just yet—$80K is coming,” Kendrick warned. “I believe we’ll see at least one day of $1 billion in ETF outflows before the market stabilizes.” The current worst day on record for bitcoin ETFs saw outflows of -$583 million.

Falling Interest Rates Could Be Bitcoin’s Saving Grace

The broader financial markets are also facing headwinds. The S&P 500 just suffered its worst week since Trump’s inauguration, while the Nasdaq is down 5% from its December peak.

Investors are weighing multiple factors, including renewed tariffs, government cost-cutting measures, and a shift in risk sentiment. However, one critical development is working in bitcoin’s favor—falling interest rates.

The U.S. 10-year Treasury yield has declined sharply from 4.80% in January to 4.32% today, signaling expectations for looser monetary policy. According to CME FedWatch, the probability of a Federal Reserve rate cut in May has jumped to 30%, while the odds of two rate cuts by June have tripled to 15%.

“Lower Treasury yields are a major long-term positive for BTC,” Kendrick concluded.

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