Bitcoin News Today: El Salvador's Bitcoin Buy Spree Defies Market Panic as BTC Dips Below $90K

Bitcoin Falls Below $90,000 Amid Volatile Market Conditions

Bitcoin (BTC) has fallen below the $90,000 psychological threshold for the first time in seven months, trading at $90,883.94 as of late Tuesday, according to CoinMarketCap data. The decline, which has erased all gains since the start of 2025, follows a week of sharp losses driven by macroeconomic uncertainty, profit-taking by long-term holders, and a risk-off sentiment across global markets as reported by CoinDesk. The crypto Fear & Greed Index, a widely watched sentiment indicator, plummeted to 10 - the lowest level since late February 2025 - signaling "extreme fear" among investors.

The sell-off accelerated after $19 billion in leveraged long positions were liquidated, triggering cascading losses according to Bitcoin Magazine. Analysts attribute the broader downturn to rising interest rate uncertainty, particularly around potential U.S. Federal Reserve cuts, and reduced institutional demand. Jake Kennis, Senior Research Analyst at Nansen, noted that the selloff reflects a "confluence of profit-taking by LTHs, institutional outflows, macro uncertainty, and leveraged longs getting wiped out" as reported by CoinDesk. Meanwhile, the CoinDesk 20 (CD20) index, which tracks the top 20 cryptocurrencies by market capitalization, lost 5.8% in a week.

Despite the volatility, some market participants see the dip as an opportunity. El Salvador, for instance, continued its aggressive Bitcoin accumulation strategy, purchasing $101 million worth of BTC in a week to bolster its strategic reserves. President Nayib Bukele's one-BTC-per-day policy has expanded the country's holdings to 7,474.37 BTC, valued at approximately $688 million. "Bitcoin is freedom, transparency, and individual empowerment," said Stacy Herbert, director of El Salvador's Bitcoin Office, defending the strategy amid global criticism.

Institutional conviction remains mixed. Strategy, the publicly traded Bitcoin firm, denied reports of selling its holdings and reaffirmed its accumulation stance. Michael Saylor, CEO of the company, forecasted that Bitcoin would outperform gold and the S&P 500 by year-end. However, ETF outflows have removed a critical layer of demand, with $870 million in redemptions reported in a single week according to TradingView. Analysts warn that further declines could test the $85,000–$90,000 support zone, with a deeper correction potentially pushing prices toward $75,000–$82,000.

The broader crypto market has also felt the strain. Ethereum (ETH) fell 5.6%, XRP dropped 3.8%, and Solana (SOL) declined 3.2% in 24 hours. Investors are increasingly seeking stability through alternative models, such as yield-generating structures and structured products, as market volatility persists. RockToken, a digital asset platform, reported growing demand for its operationally backed investment products, which offer returns independent of short-term price movements.

Meanwhile, the stablecoin sector continues to expand, with regulatory clarity in the U.S. and Europe fueling adoption. Paxos Labs launched USDG0, an omnichain stablecoin, to extend dollar-backed liquidity across multiple blockchains. The stablecoin market, valued at $303.44 billion, is seeing increased competition as firms like Obex and Tether vie for dominance.

As Bitcoin grapples with macroeconomic headwinds, the path forward remains uncertain. A recovery above the 365-day moving average could alleviate selling pressure, while continued weakness may deepen the correction. For now, the market watches for signs of institutional re-entry and liquidity shifts that could signal a turning point as reported by BeInCrypto.