Bitcoin’s $90K Support Tested: Is a Bullish Reversal on the Horizon?

Bitcoin has recently experienced sharp price swings, testing the crucial $90,000 support level following a wave of selling pressure. The cryptocurrency briefly dipped under $92,000 before making a swift recovery, reclaiming the $100,000 mark. This volatility has been exacerbated by escalating trade tensions between the U.S., China, and Canada, injecting uncertainty into global financial markets.

Bitcoin Liquid Index. Source: Brave New Coin

Now analysts are arguing, is Bitcoin already at the top of this cycle, or is there more to go? Blockchain research firm Lookonchain has looked at key on-chain metrics to determine Bitcoin’s position in the current bull run. Here’s what they found: Bitcoin hasn’t topped out and could go much higher.

Bitcoin’s Upside Potential: Could BTC Reach $250K?

A widely followed long-term indicator, the Bitcoin Rainbow Chart, says BTC still has room to run. Historically, Bitcoin tops out when it enters the “red band” on this chart. As of now, BTC is below that, so more upside is possible. Some analysts think if the trend continues, BTC could go beyond $250,000 in this cycle.

The Bitcoin Rainbow Chart suggests BTC still has room to run. Source. Lookochain on X

Another key technical indicator, the Relative Strength Index (RSI), also says Bitcoin hasn’t hit its top. In previous cycles, Bitcoin’s RSI went above 90 before a top was confirmed. Currently, the RSI is below that, so the rally may not be over yet.

And the 200-week Moving Average Heat Map also supports the idea that Bitcoin hasn’t topped out. This indicator shows where major tops tend to form when conditions are overbought.

BTC 200-Week Moving Average Heatmap. Source: Lookonchain on X

According to Lookonchain’s data, BTC is not in the overbought zone, so the bull run may have more to go.

MicroStrategy pauses Bitcoin accumulation as market uncertainties bite

MicroStrategy, the largest corporate holder of Bitcoin, has stopped buying after 12 weeks of accumulation. The company, led by Michael Saylor, now holds 471,107 BTC, worth around $30 billion.

According to the statement, MicroStrategy didn’t buy any more BTC between January 27 and February 2, 2025. This is after a $1 billion BTC purchase. While they remain committed to their Bitcoin strategy, the pause has raised questions about whether institutions are rethinking their accumulation plans given the recent volatility.

Institutional interest in Bitcoin remains strong, however, with several publicly listed companies, including Semler Scientific and Rumble, adding BTC to their treasuries. MARA, a leading Bitcoin mining company, still holds 44,394 BTC as companies start to use Bitcoin as a hedge against inflation.

Bitcoin Price Analysis: Can BTC Hold Above $100K or Fall to $90K?

After briefly reclaiming the $100,000 level, Bitcoin is struggling to maintain its bullish momentum. At the time of writing, BTC is hovering around $99,500, battling to stay above the 50-day Simple Moving Average (SMA).

BTC/USD daily chart. Source: TradingView

Market sentiment was further shaken by former U.S. President Donald Trump’s tariff announcements, which sent shockwaves through global equities and cryptocurrency markets. This led to a rapid sell-off, pushing Bitcoin to an intraday low of $91,274, where institutional buyers stepped in to prevent a further decline.

Key support and resistance levels for Bitcoin include strong buyer demand at $90,000, where over $1.8 billion in leveraged long positions are concentrated.Resistance between $102,000 and $107,000, where sellers are capping upside movements.

Technical indicators currently present mixed signals: The Moving Average Convergence Divergence (MACD) remains in bearish territory, suggesting that BTC may still face downward pressure. However, institutional buying activity at $90K could provide strong support and prevent a deeper correction.

If sellers regain control, Bitcoin could test the $95,000 support level. A breakdown below this zone might expose BTC to a deeper drop toward $90,000, where significant institutional demand is concentrated.

On the flip side, a strong bounce from current levels could push BTC toward the $106,000-$110,000 resistance zone. A decisive breakout above $110K could signal the beginning of another major rally, potentially sending Bitcoin toward $115,000 and beyond.

Bulls Defend $90K as Bitcoin Gears Up for a Breakout

Coinglass data shows $90,000 as a critical zone for BTC traders. The liquidation map shows bulls are defending this level. As BTC is at $98,907, $1.8B is concentrated at $90K; that’s a lot of buying pressure.

Bitcoin (BTC) Liquidation Map. Source: Coinglass

There is a big drop in short liquidation leverage; bears are getting squeezed as bulls take control. If BTC holds above this level, it could be a bear trap, and we could see a break above the $100,000 zone.

Also, there are clusters of long leverage in the $100,500-$105,000 range; those are key levels for a bullish continuation. But if $90,000 doesn’t hold, we could see more liquidations, and BTC could go down even further. The balance between bullish leverage and resistance will determine BTC’s next move.

According to Ali Charts, a well-known crypto analyst on X, an estimated $43 million in liquidations could occur if Bitcoin revisits $92,167. Despite recent volatility, traders are still sitting on an average 3.36% profit margin.

However, historical patterns suggest that Bitcoin typically forms a local bottom when traders’ profit margins dip below -12%, meaning that BTC could still experience further downside before stabilizing.

Bitcoin: On-chain trader Realized Price and Profit/Loss Margin: Source Ali Charts on X

As global trade tensions between the US, Canada, and Mexico escalate, institutional investors are defending the $90K support to prevent a deeper drop.

Can Trade War Fears Boost Bitcoin?

With trade disputes and economic uncertainty on the rise, Bitcoin is getting attention as a safe haven. Historically, BTC has done well during global instability as investors look for alternatives to traditional markets.

Many think rising geopolitical tensions will make Bitcoin even more attractive. Jack Toledano, CEO of Unity Wallet, says macro trends like the AI arms race and technological disruption are key to Bitcoin’s performance.

James Toledano says regulatory clarity is key for the broader crypto market, especially for assets like XRP. He says if an XRP ETF was approved, it could trigger institutional investment and take XRP to new highs. That’s the same as Bitcoin’s institutional demand, so clear regulations and mainstream adoption will drive big price movements across the entire crypto space.