Bitcoin breaks below 200-day moving average for first time in 2025, signaling potential further decline. Bitcoin plunged below $80,000 this week, breaking through its 200-day moving average for the first time in 2025. The premier cryptocurrency has shed nearly 20% in the past seven days. Analysts now question how deep this correction might go as several technical indicators flash warning signs.
Market Sentiment Turns Bearish
Bitcoin’s recent decline comes amid broader market turbulence affecting risk assets globally. The Nasdaq has tumbled approximately 7% over several sessions, with chipmaker stocks leading the downturn. Moreover, traders have begun taking profits after Bitcoin’s remarkable post-election rally.
“Every possible good news item imaginable has come and gone without much upward pressure on price,” says Quinn Thompson, founder of hedge fund Lekker Capital. Thompson warns investors have “forgotten that bear markets are possible and what they look like.” His price target for Bitcoin sits in the $70,000 range by March’s end.
CME Gap Points to $78,000 Support
Technical analysts have identified a critical CME futures gap below the $80,000 mark that likely needs filling. This gap, formed between approximately $77,930 and $80,670, appeared during Bitcoin’s November surge above $90,000.
Historically, such gaps act as price magnets. The discontinuity between weekend spot trading and weekday CME futures often creates these technical anomalies. The current gap aligns with Bitcoin’s 200-day exponential moving average, now hovering around $79,500.
Additionally, significant liquidity has accumulated in the lower $70,000 range. This could further attract prices downward before any sustainable recovery begins.
Trump Policies
Recent economic policies have contributed to Bitcoin’s downturn. President Trump‘s expanded tariff threats against Mexico, Canada, and China have unsettled markets. Furthermore, hot inflation data has dashed hopes for Federal Reserve rate cuts.
“Maximum caution is warranted in risk assets,” Thompson notes. “Inflation data is coming in way too hot for the Fed to cut rates in the near-term.”
The initial post-election “Trump bump” appears to have faded. Many analysts now characterise it as a “dead cat bounce” rather than sustainable economic momentum. Consequently, this macroeconomic environment continues pressuring Bitcoin alongside other risk-on investments.
Technical Support Levels to Watch
Several key technical support levels could determine Bitcoin’s trajectory in the coming weeks.
First, the $72,000 support zone established during November’s post-election rally remains crucial. Below that, the $65,000 level might provide temporary relief. The $58,000-$60,000 area represents a major demand zone that must hold to prevent further collapse.
Finally, the August 2024 support level above $52,000 stands as Bitcoin’s last major defensive line. Breaking below this threshold could trigger significantly deeper corrections.
Altcoin Rotation
Interestingly, altcoins have begun breaking out “massively against Bitcoin,” according to van de Poppe. This rotation typically occurs during Bitcoin consolidation phases. However, current market conditions suggest something more concerning.
The liquidation of leveraged Bitcoin positions has accelerated the selloff. Many traders who entered positions during the memecoin speculation bubble earlier this year face margin calls. Subsequently, these forced sales create additional downward pressure.
Steven Lubka from Swan Bitcoin observes, “The lack of visible short-term catalysts and pressure from equities creates an environment for profit-taking and pressure from shorts.” Nevertheless, long-term investors continue accumulating, viewing this correction as a potential opportunity.
In conclusion, Bitcoin faces significant technical hurdles ahead. The cryptocurrency must reclaim the 200-day moving average to restore bullish momentum. Otherwise, further declines toward the $70,000s appear increasingly likely as 2025 progresses.
Written By Fazal Ul Vahab C H
