Bitcoin Forecast: BTC Approaches the Critical 90,000 Support Zone

Bitcoin has recorded a decline of more than 11% from its last high reached on January 20, when it traded at $109,000 per BTC. The recent selling wave, driven by a drop in market confidence, has maintained a consistent bearish trend, bringing the price closer to the $90,000 zone.

The Impact of CPI

During the session, the official inflation data for the United States was released, with the monthly CPI coming in at 0.5%, surpassing the 0.3% expected by the market. On an annual basis, inflation reached 3.0%, exceeding the 2.9% forecast.

The market has interpreted this data as a key signal regarding the Federal Reserve’s upcoming decisions. With a new rise in inflation, the central bank may opt to keep interest rates stable at 4.5%, as the 2% annual target still appears distant, and so far, the FED has not been able to steer the economy toward that goal.

As an initial reaction, Bitcoin dropped more than 2%, as investors remained cautious about the possibility of a more aggressive Federal Reserve. Higher interest rates can affect consumption in the U.S., weakening corporate sales and market confidence, which, in turn, impacts the performance of risk assets like Bitcoin. If concerns about a restrictive monetary policy continue to dominate, downward pressure on Bitcoin could intensify in the short term.

What About the Market Confidence?

The Crypto Fear and Greed Index currently sits at 35, placing it within the "fear" territory. Additionally, this indicator has dropped from 48 last month to below 40 in recent sessions, reflecting a rapid decline in market confidence. The increase in bearish positions has been a major factor in this loss of optimism.

CMC Crypto Fear and Greed Index Behavior

Source: Coinmarketcap

Since December 2024, the Fear and Greed Index has shown a consistent downward trend, moving from an "extreme greed" reading of 81 to a "fear" level of 35. During this period, Bitcoin’s price has followed a downward trajectory, aligning with the market's loss of confidence. If the Crypto Fear and Greed Index continues to decline, it is likely that selling pressure on Bitcoin will persist in the short term.

CMC Crypto Fear and Greed Index Trend Chart

Source: Coinmarketcap

Bitcoin Technical Forecast

Since its all-time high of $109,000, Bitcoin has undergone one of the largest bearish corrections in the past three months. Currently, it has fallen more than 11% since mid-December and is approaching a critical support level at $90,000.

Source: StoneX, Tradingview

• Consolidation of the Lateral Range: The market remains indecisive, forming a short-term lateral range between the $106,000 resistance and $90,000 support.

   

  • 106k: Resistance level representing the comfort zone for bullish movements over recent months and aligning with the last all-time high. If the price stays near or above this level, market confidence could recover, potentially triggering a new uptrend.

     

  • 98k: Intermediate resistance zone, aligning with the 50-period simple moving average. A sustained breakout above this level could strengthen the bullish bias, encouraging buyers to target previous highs.

     

  • 90k: Key support level for bearish movements. If this barrier is breached, it would mark the fourth time the price tests this level, and a sustained breakdown could threaten the lateral channel that has held since November 2024.

     

  • 86k: Secondary support, marked by the 100-period moving average. If selling pressure continues and the price falls to this zone, it could confirm the formation of a more structured bearish trend in the BTC chart.

     

• ADX: The ADX line has been gradually approaching the 20 level, indicating that the market is close to confirming a stronger trend movement favoring bearish positions. If the ADX line continues rising, the bearish bias may solidify in the Bitcoin market, leading to more pronounced movements in the short term.

By Julian Pineda, CFA – Market Analyst