Bitcoin Update: BTC Eyes $90K Support Retest as Volatility Hits Record Lows
Market Uncertainty Weighs on Bitcoin, Traders Expect Major Move
Bitcoin (BTC) enters the last week of February in a tight trading range, with concerns rising over a potential retest of the $90,000 support level. As volatility drops to historic lows, traders are closely monitoring whether bulls can regain control or if a deeper correction is on the horizon.
Key Factors Driving Bitcoin’s Price This Week
Several macroeconomic and technical indicators are shaping BTC’s trajectory:
- Liquidity buildup around $90K and $94.7K suggests an imminent major price move.
- The U.S. inflation report (PCE Index) on February 28 could trigger volatility.
- Gold continues to set new all-time highs, while the U.S. dollar stabilizes.
- Bitcoin’s implied volatility is near record lows, historically preceding large market shifts.
- Slowing network activity raises concerns over market strength.
Traders Watch $90K Support as Market Momentum Fades
After last week’s rally attempt was disrupted by the Bybit hack, BTC remains stuck in a range. Trader CrypNuevo highlights key liquidity levels at $94.7K and $92.5K, while others warn of a potential drop toward $90K if bulls fail to reclaim $98.4K on a daily close.
Luca, a well-known trader, points to Bitcoin’s bull market support band, which has held since October 2024, as a key level to watch.
Stagflation Fears and Fed Policy in Focus
The upcoming PCE inflation report on February 28 will be a major catalyst. Recent jobless claims data suggest the U.S. economy may be entering stagflation—a mix of high inflation and slow growth.
While stagflation hasn’t always been bearish for risk assets (historical data shows the S&P 500 delivered positive real returns in 75% of such instances since 1930), Bitcoin’s reaction will largely depend on whether inflation data alters expectations for Federal Reserve policy.
Gold Surges as U.S. Dollar Stabilizes
Unlike Bitcoin, gold continues to rally, reinforcing its role as a global safe-haven asset. Meanwhile, the U.S. dollar (DXY index) is attempting to reverse its downtrend, which could impact Bitcoin and other risk assets if dollar strength returns.
Bitcoin Volatility Nears Multi-Year Lows—A Major Move Incoming?
On-chain data from Glassnode reveals Bitcoin’s 1-week realized volatility has dropped to 23.42%, a level seen only a handful of times in the past four years. Historically, such compressions have preceded major price swings.
Additionally, Bitcoin’s network activity is slowing, with declining active addresses and ETF inflows. Analysts at CryptoQuant note similarities to September 2023 and the 2017 cycle peak, where a drop in unspent transaction outputs (UTXOs) signaled a cooling market.
Key Bitcoin Levels to Watch
- $90,000 Support: A break below could trigger a deeper correction.
- $98,400 Resistance: A breakout above this level could revive bullish momentum.
- Impact of PCE Data: Higher inflation could delay Fed rate cuts, affecting Bitcoin’s short-term trend.
With market sentiment turning neutral and historical volatility at extreme lows, traders expect a decisive move in the coming weeks. February’s close and early March price action will be critical for Bitcoin’s next major trend direction.
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