Bitcoin price action has investors concerned as the leading cryptocurrency tests critical support levels. With BTC struggling to maintain its footing, several significant factors are contributing to the current market downturn. Let’s examine why Bitcoin is declining and what traders should watch for in the coming days.
Bitcoin is currently down by 7% in the last 24 hours, close to testing a crucial support level around $87,000, marked by significant historical buying interest.
Price Analysis: Bitcoin at Critical Support
The technical picture suggests caution is needed. If Bitcoin closes below this threshold on either daily or weekly timeframes, chart analysis indicates a potential drop toward the $73,000 region.
The current price action doesn’t inspire confidence as Bitcoin is about to test the $87,000 support zone. Should bulls fail to defend this level and reclaim territory above $87,000, selling pressure could intensify, potentially accelerating the decline toward lower support levels.
Why Is Bitcoin Down Today?
According to Master of Crypto on X, three key factors are driving the current market decline which is discussed below.
Escalating Tariff War Impacts Markets
Yesterday’s announcement that 25% tariffs on goods from Mexico and Canada would be implemented immediately has sent shockwaves through financial markets. This decision by President Trump negatively impacted traditional stock markets, with both the S&P 500 and NASDAQ experiencing significant pressure.
As often happens during periods of economic uncertainty, this market turbulence has spilled over into the cryptocurrency space, triggering widespread selling across digital assets.
Major Exchanges Offloading Assets
On-chain data reveals concerning selling activity from several prominent cryptocurrency exchanges. Binance, one of the largest trading platforms, has been actively selling various cryptocurrencies, contributing substantially to the overall market sell-off.
The selling has not been limited to one exchange. Bybit reportedly sold approximately $260 million worth of digital assets, while Binance has been unloading various cryptocurrencies including Ethereum (ETH) and Solana (SOL).
Widespread Liquidations Amplifying Market Moves
A series of massive liquidation events has further destabilized the market. Binance has liquidated millions in leveraged long positions as retail investors continue attempting to “buy the dip” using excessive leverage, often resulting in substantial losses.
A particularly significant liquidation event occurred on February 3, 2025, with estimated losses ranging between $2 billion and $10 billion, depending on the source. While not attributed specifically to any single exchange, this event impacted the broader cryptocurrency market substantially.
More recently, another $918 million in liquidations occurred, primarily affecting Bitcoin long positions. This followed market downturns triggered by economic policy announcements. These liquidation cascades typically amplify price movements, potentially pushing Bitcoin toward lower support levels.
What Traders Should Watch
Bitcoin stands at a critical juncture. The $87,000 support level represents a key battleground between bulls and bears. A failure to hold this level could confirm a bearish breakdown, potentially triggering a decline of approximately 17% toward the $73,000 target.
Read Also: Bitcoin Price Could Dip Again as Key Indicator Turns Bearish: BTC Price Analysis
For bullish momentum to return, buyers need to step in decisively and reclaim levels above $87,000. Without this recovery, selling pressure could continue building, pushing prices lower in the coming days and weeks.
