Towards the end of last year (2024), the crypto industry witnessed remarkable shifts, with tokens like Bitcoin recording historic highs. But this did not just end with the year, as Bitcoin registered its all-time high of $109,000 early this year. Unfortunately, this would change towards the end of February – the token dropped significantly to about $82,000.
Of course, such sharp trends normally raise questions of whether they are just healthy market corrections or harbingers of more troubling times ahead. A closer look at the Bitcoin price analysis by different experts can actually confirm this. Some believe the currency still has a bright future, while others expect the price to drop even further. And if you’re stranded about the token’s possible future, read on.
Why the drop?
By February 27th, the currency was trading at about $86,373, a 3.08% drop from the previous close. This was associated with notable volatility, as intraday highs reached $89,228 and lows dipped to $83,937. The prices continued dropping in the following day, reaching $82,133.
This was the first time since September 2024 for Bitcoin to fall below 200 EMA (Exponential Moving Average). According to many analysts, such a long-term moving average could be the dividing line between a bullish and bearish trend. In theory, this trend gives the impression that sellers are gaining the upper hand, which could result in further price declines.
Within just three trading sessions, the currency broke out of the consolidation range it had been in since November, sliding by about 15%. According to several experts, various factors, including regulatory uncertainty in major nations, have contributed to these price changes.
Remember, big-money players (like hedge funds and corporations) often want clarity before diving in. If the rules are murky, they hesitate to invest, which reduces demand and suppresses prices. In agreement with this, Thomas Erdosi, head of product at CF Benchmarks, noted that the absence of such bullish catalysts kept BTC prices range-bound in the past few weeks.
More reasons for the decline
Security is another concern that potentially affects the prices of cryptocurrencies. Given that attacks targeting this industry continue to increase, the need to ensure online safety has become more apparent. In fact, a recent report by Chainalysis revealed that stolen funds in this industry had increased by about 21% YoY to $2.2 billion.
And just recently, a popular crypto exchange was reported to lose close to $1.5 billion. Such incidents normally affect investor confidence, which may lead to lesser demand. Mark you: Pew Research Center suggests that up to 63% of individuals are not confident that the current ways of investing and using crypto are secure. Now, imagine how this, put together with prevailing security incidents, can affect the industry.
On top of that, other experts also suggest that the massive exit of investors from bitcoin-backed ETFs (exchange-traded funds) could also have contributed to this decline. LSEG revealed that the largest ETFs were poised for a net monthly outflow of as much as $644 million. Can you imagine that this would have been the largest since the funds were launched over a year ago?
What should investors do?
Some experts suggest the need to keep a close watch on how the currency will react at the 200 EMA level. The bulls could move toward a lower boundary of the consolidation range if the level holds. But if it doesn’t, we could see the price decline even more.
Given the volatility of these tokens and the uncertainty that clouds the industry, experts remain undivided about BTC’s future. For example, Arthur Hayes recently issued a stark warning on his X (formerly Twitter) account, claiming that the price decline could continue. According to him, the prices may collapse to as low as $70,000.
On the other hand, Michael van de Poppe suggests that this downward trend is just a liquidity hunt before we can witness a bullish reversal. Here is a summary of his opinions:
- The token had to dip below $90,000 to activate resting buy orders
- Bitcoin’s eventual bottom might be $83,000 – $87,000
- After it has reached this liquidity zone, the next leg up could follow
Markus Thielen agreed with these sentiments, suggesting the $85,000 zone as the coin’s critical support level. According to Thielen, this level, alongside the 200-day EMA, may actually be the coin’s turning point.
For investors, the path forward hinges on balancing caution with conviction. If you’re a long-term believer in Bitcoin’s potential as a store of value or a decentralized currency, dips like these might present buying opportunities. Dollar-cost averaging (DCA)—investing a fixed amount at regular intervals—remains a popular strategy to mitigate volatility.
On the flip side, those with a shorter investment horizon should stay informed about macroeconomic trends and regulatory news. Setting clear stop-loss levels and taking profits along the way can help protect against severe losses.
To sum it all up, Bitcoin’s recent dip is a testament to the currency’s inherent volatility. And, of course, factors like the growing emphasis on online safety really affect its price changes.
Since there are very divided opinions about this currency’s future, you may want to exercise a lot of caution as you invest. After all, Bitcoin’s story is still unfolding, and only time will tell whether this dip was a mere bump in the road or a sign of stormier weather ahead.
