Bitcoin drops under $90,000, are institutions truly long BTC?

Bitcoin (BTC) climbed to a high of $94,416 early on Monday before erasing newfound gains and dropping under $90,000 support. Market movers and recent bullish developments, such as the United States (US) strategic reserve announcement, the upcoming crypto summit at the White House and BlackRock’s announcement regarding portfolio allocations, failed to catalyze a sustainable rally in Bitcoin.

Why Bitcoin is back under $90,000
Crypto traders observed heightened volatility in the Bitcoin price on Monday as market participants digested the news of Trump’s US crypto strategic reserve announcement and anticipated positive developments at the upcoming crypto summit on Friday.

The Bitbo Bitcoin volatility index tracks the volatility of the BTC price in US Dollars. The index shows a spike in volatility between February 23 and March 2. Volatility has climbed from 1.53% to 2.06%.

Typically, positive developments in the market tend to push Bitcoin prices higher.However, during periods of heightened volatility, BTC could swing either way. Therefore, BTC is likely to correct once the “hype” or “speculation” narrative fades, among other market movers.

Close to the $90,000 support, specifically between the $88,118 and $92,035 levels, traders hold over $34.83 billion worth of Bitcoin. If the price drops unexpectedly, these wallet addresses are likely to be pushed underwater, meaning they could face unrealized losses on their BTC holdings, according to IntoTheBlock data.

The $90,000 level is, therefore, a key support for Bitcoin as the crypto attempts to recover and rally towards the $100,000 milestone.

Japanese Yen retreats to the lower end of its daily range against US Dollar

The Japanese Yen (JPY) surrenders a major part of intraday gains against its American counterpart, pushing the USD/JPY pair back closer to mid-149.00s heading into the European session on Tuesday. Data released from Japan earlier today showed an unexpected uptick in the Unemployment Rate and a fall in corporate capital expenditure for the first time in three years, which, in turn, prompts some selling around the JPY.

Any meaningful JPY depreciation, however, still seems elusive in the wake of the hawkish sentiment surrounding the Bank of Japan’s (BoJ) policy outlook. Apart from this, the risk-off mood and US President Donald Trump’s threat to Japan over currency devaluation should act as a tailwind for JPY. This makes it prudent to wait for some follow-through buying before confirming that the USD/JPY pair has formed a near-term bottom.

Japanese Yen bulls turn cautious amid a modest USD uptick; downside seems cushioned
Growing speculation that the Bank of Japan will hike interest rates sooner rather than later keeps the yield on the benchmark 10-year Japanese government bond close to its highest level since 2009 and continues to underpin the Japanese Yen.

Ukrainian President Volodymyr Zelenskiy’s meeting with US President Donald Trump ended in disaster on Friday. A White House official confirmed that the US has paused military aid to Ukraine, which adds to the uncertainty in markets.

Trump’s tariffs on Mexican and Canadian goods will take effect this Tuesday, along with a new 10% levy on Chinese goods. China’s Commerce Ministry vowed to take necessary countermeasures to safeguard legitimate rights and interests.

Trump said on Monday that he has warned the leaders of China and Japan against devaluing their currencies against the US Dollar, arguing that such actions put American industries at a disadvantage.
Japan’s Finance Minister, Katsunobu Kato, said on Tuesday that the country is not pursuing a policy of devaluing the domestic currency and Japan has confirmed its “basic stance on currency policy” with US Treasury Secretary Scott Bessent.

Speaking at a separate news conference, Japan’s Economy Minister Ryosei Akazawa said that the government intervenes in the currency market only when the movement is “speculative”.
Japan’s Prime Minister Shigeru Ishiba adds that the government is not pursuing so-called currency devaluation policy.

Data released earlier this Tuesday showed that the Unemployment Rate in Japan unexpectedly edged up from 2.4% to 2.5% in January and Japanese companies reduced spending on plants and equipment in October-December by 0.2%.

The Institute for Supply Management’s (ISM) Manufacturing PMI slipped to 50.3 in February from 50.9 in the previous month, while the Prices Paid Index jumped to 62.4, or nearly a three-year high amid worries about duties on imports.

Moreover, investors remain concerned that Trump’s policies would increase price pressures and slow down activity in vital industrial sectors. This might force the Federal Reserve to cut rates further and weigh on the US Dollar.

Forex Today: The RBA takes centre stage

The US Dollar Index (DXY) came under renewed selling pressure, setting aside three daily advances in a row and returning to the 106.50 region amid a mixed tone in US yields. The RCM/TIPP Economic Optimism Index is due, seconded by the API’s weekly report on US crude oil inventories. In addition, the Fed’s Williams is due to speak.

EUR/USD jumped to two-day highs above the 1.0500 mark on the back of renewed optimism around a potential end of the Russia-Ukraine war. Next on tap on the euro docket will be the release of the Unemployment Rate in the region, while the final HCOB Services PMIs in Germany and the euro area, as well as Producer Prices in the whole bloc are all expected on March 5.

GBP/USD climbed to fresh 2025 peaks past the 1.2700 hurdle on the back of the intense sell-off in the Greenback. The final S&P Global Services PMI will take centre stage on March 5, seconded by speeches by the BoE’s Bailey and Pill.

Renewed downside pressure motivated USD/JPY to leave behind three consecutive days of gains despite an initial move to muti-day highs around 151.30. Japan’s Unemployment Rate will be published, followed by Capital Spending figures and the Consumer Confidence gauge.

AUD/USD set aside six consecutive daily pullbacks and regained the 0.6200 barrier and above on Monday. The publication of the RBA Minutes will be at the centre of the debate, along with Retail Sales, and quarterly Current Account results. Additionally, the RBA’s Hauser is due to speak.

WTI dropped markedly and broke below the $68.00 mark per barrel to hit new YTD lows after the OPEC+ confirmed it will proceed with supply hikes in April.

Prices of Gold charted a decent advance and revisited the vicinity of the $2,900 region per troy ounce, leaving behind two daily drops in a row. Silver prices rebounded markedly to two-day peaks around $31.70 per ounce.