Bitcoin Struggles Below $85,000: Is the Bullish Trend Ending?

Bitcoin (BTC) is once again under pressure after failing to hold above $85,000, despite the stock market posting strong gains, with the S&P 500 rising 1.9%. It has been over a week since Bitcoin last touched $90,000, leading investors to question whether the bullish trend is coming to an end and how long the selling pressure will last.

According to Cointelegraph, although Bitcoin has dropped around 30% from its all-time high of $109,354 on January 20, 2025, market indicators still suggest strong investor interest. One key metric, the Bitcoin basis rate, which measures the difference between monthly futures contract prices and spot prices, has returned to a healthy level after showing bearish signals on March 13.

Typically, traders expect an annual premium of 5% to 10% as compensation for the risk of delayed contract settlement. Currently, the premium stands at around 5%, lower than 8% two weeks ago, but still within a normal range. This indicates that while demand for leveraged positions has declined, market conditions remain stable without signs of panic.

Bitcoin's Growing Correlation with the Stock Market

Bitcoin's price movements have recently become increasingly aligned with the stock market, particularly the S&P 500 index. This raises the question of whether Bitcoin can still be considered an uncorrelated asset.

If the stock market weakens due to recession fears, investors may avoid risky assets like Bitcoin and shift toward safer investments such as short-term bonds. However, many analysts believe central banks will eventually introduce stimulus measures to prevent a recession. If that happens, scarce assets like Bitcoin could see a strong resurgence.

Currently, according to CME FedWatch Tool, the likelihood of U.S. interest rates falling below 3.75% before the FOMC meeting on July 30 remains below 40%. This suggests that tight financial conditions will persist in the near term.

Can Bitcoin Rebound to $90,000?

For Bitcoin to regain strength, the stock market—especially the S&P 500—must first stabilize after its recent 10% correction. If equity markets recover, Bitcoin has a strong chance of climbing back to $90,000.

However, if selling pressure persists and investors continue withdrawing funds from Bitcoin ETFs, prices could remain under pressure for an extended period. Despite this, the Bitcoin derivatives market still signals stability.

The 25% delta skew indicator, which reflects sentiment in options trading, remains in the neutral zone. This suggests that most traders do not expect Bitcoin to drop further to $76,900 anytime soon.

Additionally, in the margin market, long positions on Bitcoin continue to dominate. The long-to-short ratio on OKX currently stands at 18:1. In an overly bullish market, this ratio can reach 40:1, while in a bearish market, it typically falls below 5:1. This indicates that despite selling pressure, investor optimism remains high.

Over the past week, the market has experienced a major liquidation, with over $920 million in leveraged long positions being wiped out. If recession fears start to fade, Bitcoin has a strong chance of returning to the $90,000 level in the coming weeks. However, if global economic uncertainty persists, Bitcoin’s price may remain sideways or even decline further.