Bitcoin Drop To $95,000 Could Be Imminent, Analyst Warns

Bitcoin‘s BTC/USD Monday dip and the broader altcoin decline may not solely a result of the launch of DeepSeek, according to a prominent cryptocurrency analyst.

What Happened: Pseudonymous analyst Stockmoney Lizards broke down the key reasons behind the drop in a detailed thread on X on Tuesday:

• China-based AI firm DeepSeek shook U.S. tech markets, affecting crypto sentiment. Lizards notes this is a temporary spike in Fear, Uncertainty, and Doubt (FUD) with no fundamental change for Bitcoin.  
• Bitcoin's recent pump has trapped liquidity in leveraged long positions, prompting market makers to force drops in price to release it. Heatmaps suggest a possible retracement to $95,000 as part of this normal market correction.
• With no expected rate cuts from the Fed, risk assets like Bitcoin face pressure. However, Lizards believes this scenario is already priced in and won't have a major long-term effect on Bitcoin’s fundamentals.
• The "sell-the-news" effect after Donald Trump's inauguration, coupled with a lack of near-term catalysts, could contribute to headwinds for Bitcoin. This is reminiscent of prior patterns seen around ETF approvals.

Lizards also pointed out that fears of rising trade tariffs under Trump, as well as the speculative launch of coins like TRUMP and MELANIA, contribute to altcoin underperformance. These factors reflect broader structural issues in the altcoin market, but not Bitcoin.

Also Read: Bitcoin, Ethereum, Dogecoin To Thrive In Q1, Prominent Trader Says

What's Next: Stockmoney Lizards predicts that Bitcoin will likely retrace to the $95,000-$96,000 range in the short term, allowing liquidity to clear and establishing stronger support.

BTC's recent breakout from a pennant pattern suggests a potential retest of the upper trendline, which could set the stage for the next upward move.

While the current drop is seen as temporary, driven by liquidity shifts, sentiment changes, and external factors, the trader maintains a positive long-term outlook for Bitcoin.

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