Bitcoin Drops Below $100K Amidst Inflation Fears and Market Correction

Bitcoin, the world's leading cryptocurrency, has experienced a dip in price despite closing January above the psychological $100,000 level. The asset has since fallen below this notable threshold just a day before the first business day in February.

Market observers attribute the dip to inflation worries that have swept the broader market. Many market participants fear that President Donald Trump's imposition of tariffs on Mexico, Canada, and China could trigger inflation. Others see the dip as part of a wider market correction, which could potentially push BTC to $95,000. However, Ryan Lee, chief analyst at Bitget Research, identifies $95,000 as a crucial support level.

Lee emphasizes the importance of investors monitoring the broader financial space, as it concerns federal policy expectations. He also expects market sentiments to play a role in determining the next move for Bitcoin. Interestingly, Lee believes Bitcoin's price might react to macroeconomic factors, such as the U.S. labor report, which could shape the coin's price outlook for February.

Meanwhile, Sensei, another analyst on X, describes the current Bitcoin dip as a "huge bear trap." He notes that BTC traders anticipating further decline might get caught unaware of Bitcoin's rebound. Sensei calls on traders to exercise caution, particularly those trading on short positions. If his projections turn out accurate, Bitcoin might record a sharp recovery.

As of this writing, Bitcoin is changing hands at $99,250.69, representing a 2.57% decline in the past 24 hours. The coin hit a low of $98,137.60 in earlier trading but has seen a mild 3.34% uptick to $42.78 billion in trading volume.