Bitcoin Pulls Back After Approaching $100K What’s Next?
Bitcoin, the world’s leading cryptocurrency, experienced a significant pullback in February 2025 after nearing the $100,000 milestone. It dropped below $92,000, marking its lowest level since December 2024. This volatility has raised questions about the future of the digital asset amid a complex mix of economic, political, and technical factors. What’s driving this decline, and what are the market expectations in the coming months?
Macroeconomic Factors The Fed and Liquidity
One of the key reasons is the U.S. Federal Reserve’s monetary policy. With indications that interest rate cuts may be delayed until March 2025, investor concerns over slowing market liquidity have grown, negatively impacting risk assets like Bitcoin. Additionally, the U.S. Treasury General Account (TGA) balance surged from $623 billion to $800 billion, draining liquidity from the markets, increasing borrowing costs, and reducing investment in cryptocurrencies.
Profit-Taking A Strategy for Long-Term Holders
Throughout 2024, Bitcoin’s price surged by over 100%, prompting investors who bought at lower levels to collectively take profits. It is believed that these investors, particularly large institutions, sold a portion of their holdings after the price neared $108,000 in December, creating downward pressure that persisted into February 2025.
Regulatory and Political Developments: Between Trump and Regulations
The wavering statements from President Donald Trump's administration regarding the creation of a national strategic Bitcoin reserve have raised investor concerns. Despite campaign promises to support cryptocurrencies, the administration has been slow to take concrete steps, leading to short-term disappointment and a decline in confidence. Additionally, Trump's omission of cryptocurrencies in his inauguration speech in January 2025 further fueled market volatility.
Technical Indicators: Support, Resistance, and Divergence
From a technical perspective, Bitcoin has faced strong resistance at the $100,000 level, with multiple failed attempts to break through since December 2024. The weekly chart has also shown a bearish divergence between price action and the Relative Strength Index (RSI), resembling the pattern that preceded the 2021 crash, indicating weakening upward momentum.
The key support level currently stands at $90,000. According to EGRAG CRYPTO analysis, a breakdown below this level could trigger a drop to $75,000, especially if Bitcoin loses support from the 50-day moving average.
Future Outlook: Between Optimism and Caution
Despite the recent pullback, the long-term outlook remains positive. Reports from Fidelity and Standard Chartered suggest that increased adoption of Bitcoin by governments and central banks as a reserve asset could push its price to $180,000 or higher by the end of 2025. Additionally, the Federal Reserve’s reverse repo facility (RRP) balances have dropped to their lowest level in 1,387 days, indicating a potential liquidity influx into risk assets, including Bitcoin.
On the other hand, analysts like Ali Martinez warn that breaking below $92,000 could trigger a massive sell-off, especially since 1.77 million addresses hold Bitcoin in the $95.4K–$98.4K range, adding to the downward pressure.
Opportunities Amid Challenges
Bitcoin’s pullback after nearing $100,000 reflects the market’s reaction to various factors, from profit-taking to political uncertainties. However, history suggests that major corrections often precede new all-time highs. Investors now face two choices: buy at support levels or wait for indicators to stabilize.
In the end, Bitcoin remains a long-term game. As Michael Saylor, CEO of MicroStrategy, puts it: “Time is the friend of scarce assets