Why Bitcoin fell below $90,000
Bitcoin’s drop below $90,000 was primarily caused by a series of prolonged liquidations. As large leverage had been built up, a slight drop in price triggered a stop loss and a forced sell, accelerating the move. The timing was also influenced by traders reducing risk ahead of the US core PCE inflation report, which typically causes volatility. With liquidity still relatively tight, even moderate selling pressure quickly snowballed, sending BTC to the low $89,000s.
Inflation calms down and macroeconomic conditions turn bullish
The bearish move did not last long. Immediately following the decline, core PCE came in at 2.8% versus the expected 2.9%, confirming that inflation continues to slow. Morgan Stanley predicted a 25 basis point rate cut in December, and White House advisor Kevin Hassett also urged the Fed to begin easing, increasing expectations for a rate cut.
At the same time, quantitative tightening officially ended, leading to major changes in the liquidity situation. Historically, Bitcoin bull markets have coincided with liquidity expansions rather than contractions.
Liquidity returns: stablecoins and institutional demand
The minting of $500 million USDC signals that new capital is preparing to enter the crypto market and is a classic harbinger of renewed upward momentum. Financial institutions have also actively intervened. BlackRock deposited more than $120 million in BTC into Coinbase Prime, Vanguard gave 50 million customers access to Bitcoin ETFs, and JPMorgan and Goldman Sachs expanded their crypto exposure through new products and acquisitions.
As capital circulates from stablecoins to risk assets and the transition to a more supportive liquidity environment intensifies, USDT’s dominance begins to decline.
What comes next after Bitcoin?
If Bitcoin stays above $90,000, the next important levels are $92.5,000, $95,000, and the psychological $100,000 zone. This decline increasingly resembles a liquidity flush rather than a structural failure. If BTC retests the lows, support remains at $88,000 and $86,500, but the macro backdrop of cooling inflation, rising stablecoin liquidity, the end of QT, and institutional accumulation suggests a recovery is more likely than a sustained decline.
Bitcoin fell not because its fundamentals weakened, but because it was deleveraged at the exact moment the macro environment turned bullish.
