Bitcoin Tests $88,000 Support Level as Analysts Disagree on Severity of Current Correction

Bitcoin Seeks Stability Above Key Support

Bitcoin is currently attempting to establish support near the $88,000 level as traders navigate a complex landscape of global macroeconomic factors and renewed trade tensions between the United States and the European Union ^[1]. The cryptocurrency has experienced significant intraday volatility, with prices swinging thousands of dollars in recent trading sessions ^[2].

During today's trading, Bitcoin surged from the $88,000 range to $90,500 in early morning hours before sliding back to the upper $87,000s, then rebounding toward $90,000 following President Donald Trump's announcement that he would delay planned tariffs ^[2]. The decision followed what Trump described as a "very productive meeting" with NATO Secretary General Mark Rutte, which outlined a preliminary framework for a broader deal involving Greenland and the Arctic region ^[2].

Diverging Expert Opinions on Market Trajectory

Market analysts are sharply divided on Bitcoin's near-term prospects. Veteran trader Peter Brandt suggested in a post on X that Bitcoin could potentially plunge to between $58,000 and $62,000, though he acknowledged being wrong 50% of the time and said he would not be ashamed if the price did not reach those levels ^[1].

Fundstrat head of research Tom Lee cautioned investors to prepare for a "painful decline" across both stock and crypto markets in 2025, though he expects a strong finish to the year with Bitcoin possibly making a new all-time high ^[1].

In contrast, ARK Invest CEO Cathie Wood presented a more optimistic outlook, stating she believes Bitcoin is nearing the end of its current down cycle ^[2]. "We're pretty well through the down cycle here," Wood said in a CNBC interview, pushing back against fears of a prolonged correction ^[2].

Wood argued that the most recent bull market was muted by historical standards, which she believes has limited the severity of the current pullback ^[2]. "I know there's a lot of fear about the four-year cycle," Wood said. "We didn't have much of an upcycle by bitcoin standards, so we think we're pretty well through the down cycle here" ^[2].

Critical Support Levels to Watch

Technical analysis indicates that the 20-day exponential moving average at $91,786 is sloping downward, and the relative strength index is in negative territory, suggesting bears currently have a slight edge ^[1]. If the $86,500 support level fails, Bitcoin could decline to $84,000 ^[1].

However, Wood acknowledged that Bitcoin could continue testing key psychological levels in the near term, potentially trading within an $80,000 to $90,000 range, though she expects those levels to hold ^[2]. "We may test in this $80,000 to $90,000 range on bitcoin, but we do think that the test will be successful," she said ^[2].

For a potential trend change to be signaled, Bitcoin would need to close above $97,924, which could propel the price toward $100,000 and subsequently to $107,500 ^[1].

Long-Term Perspective

Wood described the current drawdown as "the shallowest four-year cycle decline in bitcoin's short history," adding that ARK expects renewed upside once the correction fully plays out ^[2]. She framed Bitcoin's long-term thesis as "three revolutions in one": a new global, rules-based monetary system competing with fiat currencies, a breakthrough technology, and the leading asset in a new asset class ^[2].

Buyers are taking a cautious approach as they wait to assess how reignited trade tensions and other macroeconomic factors will impact markets ^[1]. The coming days will be critical in determining whether Bitcoin can successfully defend its current support levels or faces additional downside pressure.