Bitcoin extended its selloff this week, sliding below the closely watched $90,000 level as global market turbulence triggered heavy liquidations and renewed concerns over tightening liquidity.
The world’s largest cryptocurrency has now erased all of its gains for the year, with technical indicators pointing to further downside risk if key support levels fail to hold.
Bitcoin breaks key support levels
Bitcoin started a fresh decline after failing to maintain support above $92,500.
The price dropped sharply through $91,000 and $90,500 before bears pushed it decisively below $90,000.
A low was formed at $87,784, and the asset is currently consolidating losses.
The price is trading below $90,000 and the 100 hourly Simple Moving Average, with a minor rebound above $88,500 failing to regain key retracement levels.
A bearish trend line is also forming, with resistance near $94,200 on the hourly BTC/USD chart.
If Bitcoin stabilizes above $88,000, it could attempt a recovery, with immediate resistance around $89,600 and a more significant hurdle near $90,000.
Further upside would require a close above $91,650, the 50% Fibonacci retracement of the decline from the $95,475 swing high to the $87,784 low.
A move above that level could open the door to $92,000 and potentially $94,000.
On the downside, immediate support sits at $88,800, followed by $88,000.
A break below $87,500 could expose the $86,200 level, with the main support seen at $85,000, below which losses could accelerate.
Liquidations surge as markets sell off
A sharp rise in liquidations has accompanied the latest leg of the decline.
Over the past 48 hours, more than $1.8 billion has been liquidated across crypto markets, with roughly 93% of those positions being longs, according to Coinglass.
The broader crypto market has shed around $225 billion in capitalization, marking its largest decline since mid-November and bringing total market value down to $3.08 trillion.
Bitcoin has also slipped below its 50-day exponential moving average, which had previously acted as support during the recent rally, underscoring the shift in near-term momentum.
Global liquidity fears and the Japan factor
While renewed tariff threats from US President Donald Trump have contributed to market volatility, analysts point to deeper structural forces at work.
Reuters reported a revival of the so-called “Sell America” trade following Trump’s latest comments, but turbulence in Japanese bond markets has emerged as a key catalyst.
Founder and CEO of 50T Funds, Dan Tapiero, said the “wipeout” was caused by “complete annihilation in Japanese bond markets infecting all markets right now.” He added that gold could continue to rise, with Bitcoin eventually following.
US Treasury Secretary Scott Bessent echoed that view, saying: “I believe markets are going down because the Japanese [10-year] bond market had a six-standard-deviation move over the past two days.” He added that the move had “nothing to do with Greenland.”
Japanese 10-year government bond yields jumped nearly 19 basis points in two days, while 30-year yields saw their biggest daily increase since 2003, as investors priced in higher government spending and tighter liquidity.
Jeff Ko, chief analyst at CoinEx Research, said the bond market turmoil threatens to unwind carry trades and drain global liquidity.
“This threatens to accelerate the carry trade unwind, further tightening a critical source of global liquidity,” he said. “Beyond the trade war, a capital war appears to be emerging.”
For now, Bitcoin remains caught between its appeal as a hard asset and its sensitivity to global liquidity conditions.