Bitcoin Sinks Below $93K Amid Market Jitters; Analysts Predict Short-Term Relief

Bitcoin (BTC) has lost its upward momentum from early 2025, succumbing to macroeconomic headwinds and a global rise in bond yields that spooked investors across markets.

The leading cryptocurrency fell as low as $92,600 during Wednesday’s U.S. trading session, erasing nearly 10% of its value in two days after peaking above $102,000 on Monday. It has since rebounded slightly to $94,300 but remains 2.5% lower over the past 24 hours.

Major altcoins weren’t spared, with assets like Cardano (ADA), Render (RNDR), and Aptos (APT) leading declines in the CoinDesk 20 Index, which dropped more than 3% during the same period.

Crypto Markets and Related Stocks Feel the Heat

The sharp decline in prices triggered nearly $1 billion in liquidations of leveraged positions, primarily long bets, according to CoinGlass. Bitcoin is now trading near its year-to-date breakeven, up just 1% from January 1 levels.

Stocks tied to cryptocurrency also saw steep losses. Mining firms TeraWulf (WULF), Bit Digital (BTBT), Bitdeer (BTDR), Iris Energy (IREN), and Hut 8 (HUT) fell between 5% and 8%. Meanwhile, Semler Scientific, a medical devices company that holds BTC as a treasury reserve, plunged 10% and is now 40% off its late-December peak. MicroStrategy (MSTR), a major bitcoin holder, slid 2.2%.

Macro Headwinds Take Center Stage

The market’s pullback coincides with rising government bond yields globally, which have rattled risk assets. The U.S. 10-year Treasury yield surged to 4.70% this week, approaching multi-year highs, while the U.K.’s 30-year Gilt yield hit its highest level since 1998 at 5.35%. Similar upward trends were observed in Japan and Europe, compounding market anxiety.

Tuesday’s unexpectedly strong U.S. economic data further dampened sentiment, prompting traders to reduce expectations for Federal Reserve rate cuts this year. Minutes from the Fed’s most recent meeting highlighted concerns about persistent inflation risks and uncertainties tied to President-elect Donald Trump’s proposed tariff policies.

Fed Governor Christopher J. Waller attempted to calm markets on Wednesday, expressing support for additional rate cuts. However, his remarks had little impact on traders’ outlooks, as indicated by CME’s FedWatch tool.

Analysts See Room for a Rebound

Despite the recent downturn, some analysts believe bitcoin’s retreat could pave the way for a short-term bounce. With BTC revisiting the lower end of its trading range established in late November, a relief rally could be on the horizon.

“Bitcoin’s pullback doesn’t necessarily signal a bearish shift—it may just need to consolidate before making another push higher,” said Bob Loukas, founder of Station3 NYC. “We could see a bounce in the coming days, but it’s likely we’ll remain in this range before another breakout.”

Upcoming events, including Friday’s U.S. jobs report and the Federal Reserve’s policy meeting later this month, will likely influence BTC’s direction. Analysts at QCP Capital predict that optimism surrounding Trump’s January 20 inauguration could reinvigorate bullish sentiment.

“This dip feels like a natural reset for the market,” QCP noted in a Telegram update. “As Trump’s inauguration nears, we expect renewed optimism to fuel another rally in bitcoin and risk assets.”