Bitcoin Price Prediction – Why BTC Could Drop to $80k or Lower

Highlights:

• Bitcoin has lost the psychological $90k support
• Fears of stagflation are triggering a selloff across risky assets
• Continued selloff could see Bitcoin drop to $80k soon

There appears to be no light at the end of the tunnel for Bitcoin traders. This is because fears of new tariffs and inflation continue dampening investor sentiment. At the time of writing, Bitcoin was trading at $89,908, a 5% drop in the last 24 hours. This Bitcoin correction could foretell broader issues related to the global market, especially when considering the U.S. trade relations and the Fed’s policy direction.

Stagflation Fears Could Push Bitcoin Price Lower

The recent slump in the crypto market is not just a one-off. Last week, a Bank of America poll of fund managers across the globe showed a worrying trend: stagflation expectations increased drastically, which is likely to hit the US economy within a year. Stagflation, a combination of lackluster economic activity alongside persistent inflation, could push cryptocurrencies and other high-risk assets lower in the foreseeable future.

Buybacks may raise stock prices again… but the economy is crumbling, and not only in the US… As I said, 2025 is the last year of consolidation and growth, before 2026, which will leave no one indifferent and hungry like 2027…

Bank of America notes "bearish sentiment"… pic.twitter.com/FMY0TB42lb

— Agedor.art (@agedorgallery) February 24, 2025

To add to the bearish sentiment, analysts are skeptical about the Federal Reserve’s capability of taming inflation. They are reluctant to lower interest rates because that would be disastrous. According to Jack McIntyre, portfolio manager of Brandywine Global, policies that suppress consumer spending while high inflation creates a fear of stagflation.

Similarly, Tim Urbanowicz, Chief Investment Strategist at Innovator Capital Management, pointed out that stagflation becomes a more dangerous problem than just inflation’s existence.

Bitcoin ETFs See Institutional Inflows Slow Down

The combination of macroeconomic challenges and uncertainty regarding regulations continues to pressure the market despite increased inflows through Bitcoin ETFs. As Crypto Unity Wallet COO James Toledano pointed out, there seem to be no major sellers in the market. However, the investors are still on the sidelines due to the possibility of adverse economic or policy changes.

South Dakota’s Attempt to Legislate Bitcoin Investment Is Foiled

Expectations of US states adopting Bitcoin as a reserve are also fading. In South Dakota, lawmakers essentially voted to kill a bill permitting the state to invest a maximum of 10% of public funds into Bitcoin when they postponed it to the 41st day of the legislative session. The bill’s sponsor, Representative Logan Manhart, indicated he would like to try and pass it again in 2026.

My bill to allow South Dakota to invest in Bitcoin died 9-3 in committee this morning.

We will be back next year.

— Logan Manhart (@ManhartLogan) February 24, 2025

South Dakota isn’t the only state with Bitcoin legislation proposals; Florida, Arizona, Utah, Ohio, Missouri, and Kentucky have similar proposals. Unfortunately, several of these bills and proposals also seem stuck because of the split between governments in these states regarding cryptocurrency investment.

MicroStrategy Continues Bitcoin Accumulation

Despite all the bearish sentiment, there are some optimistic shifts in the Bitcoin space despite the negative sentiment. One of them is MicroStrategy’s relentless investment in Bitcoin. The company recently revealed a $2 billion purchase of Bitcoin, demonstrating trust in the asset for the long term. This action has reassured some investors, showing that institutional appetite for Bitcoin remains robust, regardless of the prevailing short-term price fluctuations.

Technical Analysis – Bitcoin Price In an Accelerated Selloff

Bitcoin has lost all support levels above $90k and is trending lower. With the rising selling momentum, the odds are high that Bitcoin could soon be headed for $85k. A breach of $85k could put prices below $80k in focus in the short term.

Bitcoin is uncertain while the market consumes institutional activity, political developments, and economic data. A continued slide could see prices as low as $70k come into focus.