Bitcoin price enters generational buying territory — Should traders expect more downside?

Bitcoin’s sharp sell-off continued on Feb. 25, with BTC (BTC) price falling to a 3-month low of $86,050. Several analysts have cited concern over US equities performance, a worrying uptick in inflation and this month’s sharp drop in consumer confidence as reasons for investors to risk off in the short term. 

Data from the Conference Board’s Consumer Confidence Index highlighted growing pessimism from US consumers as the metric fell to 98.3 in February, representing the largest monthly drop since August 2021. 

In addition to increasing worries about the US labor market and inflation, Cointelegraph analyst Marcel Pechman cited President Trump’s upcoming tariffs against imports from Canada and Mexico as another factor driving investors to adopt a risk-off strategy. 

Bitcoin analysts say don’t doubt, zoom out

While over $1.59 billion has been liquidated from the total crypto market over the past 24 hours, several crypto advocates have encouraged investors to zoom out and see the larger picture. 

On the daily timeframe, Bitcoin’s relative strength index has fallen below 27, a level not seen since the Aug. 5, 2024 crash, which saw BTC price fall to $49,000. Historically, on Bitcoin’s longer timeframes, deeply oversold RSI conditions are rare and often turn out to be opportunities to buy at a discount. 

Despite Bitcoin’s subpar short-term performance, Bitwise European head of research André Dragosch encouraged patience and referenced a chart of BTC’s post-halving performance, which suggests the larger part of its bull market rally has yet to occur. 

Related: Bitcoin enters ‘technical bear market’ as BTC price drops 20% from all-time high

Bitcoin analyst Tuur Demeester also reminded the public that beyond the cryptocurrency’s day-to-day price action, institutional adoption continues to soar, a fact reinforced by rising BTC balances among publicly listed companies.  

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.