Bitcoin Crashes Below $88K – Is This the Beginning of a Deeper Correction?

Bitcoin’s recent drop has sent shockwaves through the market, slipping 9% on Tuesday and breaking below the crucial $88,000 level for the first time in 2025. While some investors instinctively see this as a buying opportunity, analysts are urging caution.

Geoffrey Kendrick, global head of digital assets research at Standard Chartered, warned that Bitcoin might not have found its bottom yet, predicting a potential dip into the “low 80s.” At the time of reporting, Bitcoin hovered around $89,400. Meanwhile, Arthur Hayes, co-founder of BitMEX, has suggested Bitcoin could even fall as low as $70,000.

Why You Shouldn’t Buy the Dip Just Yet

Kendrick highlights Bitcoin’s exchange-traded fund (ETF) outflows as a key indicator. He believes a major outflow day—around $1 billion—would be necessary before the market stabilizes. So far, the worst ETF outflow recorded was $680 million on December 20, triggered by Federal Reserve Chair Jerome Powell’s announcement of a slower interest rate cut schedule. In just the last week, investors have pulled over $1 billion from Bitcoin ETFs, with half of that occurring on Monday alone.

For many ETF investors, the losses are mounting. Most bought in at an average Bitcoin price of $96,500, meaning they are now deep in negative territory. This selling pressure, combined with institutional rebalancing, is fueling further price declines.

Lack of a Fresh Narrative Hurting Bitcoin’s Momentum

The broader crypto market is struggling with weak demand. JPMorgan analyst Nikolaos Panigirtzoglou recently noted that both retail and institutional investors appear hesitant, with many taking profits or cutting losses due to a lack of compelling new narratives driving Bitcoin adoption.

However, long-term optimism remains. Standard Chartered previously forecasted Bitcoin reaching $200,000 this year and potentially hitting $500,000 by the end of Donald Trump’s second term, should he win reelection. But in the short term, economic conditions and Federal Reserve policies are likely to dictate price action, according to Anthony Georgiades of Innovating Capital.

BitGalactic’s Take – A Healthy Correction or Trouble Ahead?

From BitGalactic’s perspective, this correction could be a necessary shakeout before the next bull run. Historically, Bitcoin has faced significant retracements before continuing upward. However, the speed and intensity of this sell-off suggest a more complex macro-driven scenario.

A key question remains: Will Bitcoin find a strong support level soon, or is this the beginning of a larger downturn? BitGalactic analysts believe that unless fresh capital flows into the market—whether from institutional buyers, ETF inflows, or a new adoption narrative—Bitcoin may continue its decline before finding solid ground.

Market Snapshot

• Bitcoin: Down 7% in the past 24 hours, currently at $89,056
• Ethereum: Dropped sharply to $2,426

With volatility at an all-time high, traders should remain cautious. The coming days could determine whether Bitcoin’s price stabilizes—or if we’re in for a deeper plunge.