Bitcoin Struggles at $91K: Key Support Break Could Trigger Crash

Bitcoin (BTC) was trading at $91,242.92 at the time of writing, experiencing a 3.57% decline in the past 24 hours and a 7.66% decline over the last week. 

With a market capitalization of $1.81 trillion and a 24-hour trading volume of $38.48 billion, the cryptocurrency is at a critical juncture as it tests key support levels.

Bitcoin’s Technical Outlook: $91,000 in Focus

Bitcoin’s price has fallen back to the critical $91,000 support level, marking the lower range of its $91,000-$101,000 trading zone. According to crypto analyst Rekt Capital, BTC briefly rebounded from this level but has since slipped below it, indicating potential bearish momentum.

“Bitcoin remains in the $91k-$101k range until confirmation proves otherwise,” said the analyst. 

A daily close below $91,000, followed by a rejection of this level as resistance, could push the price into the lower $87,000-$91,000 range. However, if Bitcoin can maintain support above $91,000 at the close, the possibility of a recovery remains.

The rising uncertainty in Bitcoin’s price trajectory has been fueled by a mix of technical patterns and broader market sentiment. Recent data shows that Bitcoin’s rally from November 2024 left inefficiencies in the market, creating room for a reversal as traders engage in profit-taking.

Hawkish Fed Signals Weigh on Bitcoin

Macroeconomic factors are also contributing to Bitcoin’s recent struggles. The strong U.S. jobs market and the Federal Reserve’s hawkish outlook on interest rates have diminished hopes for rate cuts in 2025. In its latest meeting, the Federal Reserve reduced its anticipated rate cuts for 2025 from five to two.

This sentiment was reinforced by the Nonfarm Payroll (NFP) report, which showed strong employment numbers. The report has led to cautious optimism in traditional markets while adding pressure on Bitcoin and other risk-on assets.

Profit-Taking Ahead of Trump’s Inauguration

Investor sentiment has also been impacted by political events. Speculation about President-elect Donald Trump’s victory drove Bitcoin’s exponential rally in late 2024, during which BTC surged from $67,000 to $100,000 in just 30 days. 

Traders now appear to be closing their positions ahead of the January 20 inauguration, contributing to selling pressure.

Market analysts speculate that the lack of bullish momentum in early 2025 may stem from waning speculative enthusiasm tied to Trump’s upcoming presidency. This has led to uncertainty among traders about Bitcoin’s short-term direction.

MicroStrategy Continues Accumulation Despite Price Decline

Amid the downturn, MicroStrategy, the largest corporate holder of Bitcoin, announced the purchase of an additional $243 million worth of BTC. This follows a $101 million purchase on January 5, pushing the company’s holdings beyond 450,000 BTC.

The announcement came after Bitcoin reached an intraday low of $90,198, showing MicroStrategy’s continued confidence in the cryptocurrency’s long-term potential. However, the company’s stock (MSTR) dropped over 4% in pre-market trading following the purchase.

Bitcoin traders are closely watching daily price action at the $91,000 level, which will determine whether the cryptocurrency holds its current range or breaks lower into bearish territory.

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