Bitcoin (BTC) Drops Below $90K as Risk-Off Sentiment Prevails; Saylor Hints at Another Purchase

Risk assets are seen trading lower on Monday as the dollar index and U.S. Treasury yields benefit from Friday's stellar nonfarm payrolls report, while the Palisades Fires pose a risk to the insurance sector and some P&C companies.

BTC is seen down 2%, changing hands in the key support zone of $90,000 and $93,000. Alternative cryptocurrencies are posting bigger losses, as is usually the case. ETH has dropped to the lowest level since Dec. 21 and the risk-off mood is clouding XRP's bullish technical outlook (see TA section). Whales did appear to be accumulating XRP on South Korea-based Upbit over the weekend, as far as we can tell.

AI coins are the worst performing sub-sector of the past 24 hours. In traditional markets, futures tied to the S&P 500 are indicating a negative open, along with continued downside volatility in the British pound and emerging market currencies.

The risk-off sentiment, however, did not stop Michael Saylor from indicating a potential appetite for another bitcoin purchase as he shared an update on MicroStrategy's bitcoin purchase tracker. Whether that would put a dent in the negative market sentiment, is another story. "The firm's purchase last Monday amounted to approximately $100 million, which had limited market impact, but underscores the firm's ongoing demand," said Valentin Fournier, an analyst at BRN.

Other things being equal, the risk of BTC losing the support zone appears high as some investment banks believe the Fed rate-cutting cycle is over, with Bank of America suggesting a potential for a rate hike. Per some observers, the consensus is that prices will deflate to $70K, followed by a renewed rally.

Meanwhile, the 30-day moving average of the Coinbase-Binance BTC price differential, which has a knack of marking major price tops, slipped to the lowest since at least 2019, a sign of weaker stateside demand. Over the near term, the crypto market is likely to focus on President-elect Donald Trump's inauguration on Jan. 20 and the ongoing FTX claim distributions, according to Coinbase Institutional.

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