Bitcoin (BTC) Price Drops Sharply – What's Happening?

Bitcoin and other key cryptocurrencies have faced intense selling pressure in recent hours. While US stock markets are performing relatively well, the crypto market's weak performance is becoming increasingly apparent.

Bitcoin, which had been trading sideways just below $90,000, fell sharply at the start of US trading, falling to $86,800 during the day. At the time of writing, the largest cryptocurrency is trading at around $87,000, down more than 2% over the past 24 hours.

The market selloff hasn't only affected Bitcoin. Ethereum fell to around $3,000, while leading altcoins such as Solana, BNB, XRP, Dogecoin, and Cardano also fell by 2-4%. The overall cryptocurrency market capitalization declined significantly overnight.

Analytics firm Bespoke Investment provided an interesting assessment of market dynamics. In their analysis of the iShares Bitcoin ETF IBIT, they noted that the ETF's after-hours return was 222%, while intraday returns were less than 40%. This data suggests that Bitcoin's gains occurred primarily during US stock market closures.

From a technical perspective, some analysts believe the current decline may be temporary. Market expert Il Capo of Crypto characterized the pullback as a "bear trap" and expressed hope for a strong recovery. According to the analyst, the next important target for Bitcoin is $95,000. If this level is broken, attention could turn back to the $100,000 range.