Bitcoin Slides Below $90K as Market Fear Deepens Amid Liquidity Crunches

Bitcoin plunged under the $90,000 mark on Tuesday in Hong Kong trading, extending a sharp multi-week selloff that has erased all of its gains for 2025 and pushed sentiment to its lowest levels since the 2022 bear market. The move down to $89,420 on Coinbase — the lowest price since February — comes just weeks after the cryptocurrency hit a record high above $126,000, underscoring how quickly market momentum has shifted.

The decline accelerated after Bitcoin failed to reclaim the key $93,700 support level over the weekend. Breaking below its 200-day moving average triggered a bearish “death cross” between the 50-day and 200-day trendlines, a technical signal that often aligns with extended drawdowns when liquidity is waning. Current conditions reflect that pattern, with market depth thinning out and demand from major spot Bitcoin ETFs stalling.

U.S. spot Bitcoin ETFs, which saw over $25 billion in inflows earlier this year, have recorded nearly two weeks of flat activity. Investors appear cautious amid fears that the Trump administration’s tariff agenda could fuel inflation and push the Federal Reserve to delay anticipated interest-rate cuts. Corporate buyers that aggressively accumulated BTC in early 2025 have also pulled back.

Retail sentiment has deteriorated sharply. The crypto Fear & Greed Index fell to 11, signaling “extreme fear,” while Bitcoin’s social dominance surged as traders shift attention away from altcoins toward BTC during what may be a capitulation phase. Analysts caution that if Bitcoin cannot reclaim the $93,000 level soon, it could slide into a liquidity pocket between $86,000 and $88,000.

Still, some market observers believe the severe sentiment shock could set the stage for a short-term relief rally if ETF flows stabilize and macro data turns less hawkish. Investor Dan Tapiero noted that some capital may be rotating into stablecoins and tokenized real-world assets, but maintains that Bitcoin’s long-term fundamentals and institutional adoption remain strong, calling the current volatility “just noise.”