Bitcoin (BTC) dropped below $95,000 on Monday, as traders now set their sights on a potential retreat to $90,000 or lower amid growing uncertainty in global markets and ahead of the Federal Reserve’s policy meeting later this week. While the Fed is widely expected to keep interest rates steady on Wednesday, market participants are closely monitoring the central bank’s comments for signals on future rate cuts or adjustments to economic projections.

The pullback follows a strong two-week rally that saw Bitcoin briefly surpass $98,000, attracting both retail interest and institutional investments. However, technical indicators and macroeconomic concerns are starting to weigh on sentiment, leading some analysts to forecast further downward pressure on the cryptocurrency’s price.

Key Resistance Levels and Bearish Targets

“We’re now at a significant resistance zone that acted as support for Bitcoin between December and February,” said Alex Kuptsikevich, an analyst at FxPro, in an email to CoinDesk. He noted that the next possible downside targets for BTC are $92,500 and $89,000. “A break below $90,000 would not only be technically damaging but could also trigger psychological selling pressure, pushing Bitcoin below its 200-day moving average,” he added.

Fed Policy and Trade Tensions in Focus

Beyond Bitcoin-specific factors, broader macroeconomic issues are influencing market sentiment. Ongoing trade negotiations between the U.S. and China have added to the uncertainty, with tariff risks potentially reigniting inflationary pressures that could negatively impact Bitcoin.

While the Federal Reserve is expected to leave rates unchanged on Wednesday, the focus will be on how the central bank adjusts its outlook in response to evolving economic conditions. QCP Capital highlighted in a morning brief that solid economic data and hopes of reduced trade tensions had provided a boost to markets recently. However, they cautioned that the Fed’s stance on rate cuts, especially with the ongoing political pressure from President Trump, remains a key variable for the market.

Bitcoin ETFs Continue to Attract Investors Despite Pullback

Despite the recent pullback in Bitcoin’s price, spot Bitcoin ETFs continue to attract significant inflows. According to SoSoValue, net inflows into Bitcoin ETFs last week totaled $1.81 billion, signaling that institutional and retail investors are still interested in gaining exposure to Bitcoin. However, some on-chain data suggests that caution is warranted. Glassnode pointed out that long-term Bitcoin holders (LTHs) have seen unrealized gains reach nearly 350%, a level historically associated with heavy profit-taking.

“As Bitcoin approaches the $99,900 mark, long-term holders may begin to sell off their holdings more aggressively, which could lead to increased market pressure,” Glassnode stated.

Meme Coin Mania and Shifting Sentiment

Meanwhile, data from Santiment indicates a surge in meme coin activity, with discussions around these assets reaching a peak in 2025. This suggests that some traders are shifting back into higher-risk bets after focusing on Bitcoin and ETFs for the past few months. However, this resurgence has not translated into widespread success for meme coins. For example, GORK, a meme coin linked to an AI chatbot parody account recently mentioned by Elon Musk, failed to maintain its gains, indicating that the market for celebrity-driven pumps might be losing its strength.

With Bitcoin’s price now in a critical range, all eyes are on the Federal Reserve’s upcoming meeting and any developments in global trade. The outcome of these events could set the direction for Bitcoin in the near term, potentially triggering increased volatility if key support levels are breached.