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The cryptocurrency market's weakening momentum, coupled with ongoing geopolitical tensions, continues to hamper Bitcoin's price performance and push it lower. With BTC price and sentiment are falling Significantly, the market appears to have entered a period of heightened uncertainty and caution as investors search for alternative assets to hedge against geopolitical risks.
Bitcoin weakness reflects broader risk aversion
Bitcoin stays on a downward trend as its price is trading below the $70,000 mark, amplified by the geopolitical tensions around the globe. Due to the unfavorable conditions for Bitcoin and the sector, the market is now at a critical moment where the bearish trend could either reverse or proceed.
Walter Bloomberg divided The Bitcoin falls as geopolitical risks spur risk-averse trading after examining cryptocurrency price versus Nasdaq futures. Such a synchronized decline suggests that market behavior across asset classes is once more being driven by macroeconomic variables resembling changing rate of interest expectations and a general sense of risk aversion.
The report shows that Bitcoin fell 1.7% to around $67,000 ahead of the United States Open, tracking weaker stock futures. Meanwhile, Nasdaq 100 futures fell 0.9% and S&P 500 contracts fell 0.6%.
BTC and Nasdaq in the identical downtrend | Source: Chart by Walter Bloomberg on X
This development has influenced investor sentiment and focus. Currently, investors have gotten more cautious because of growing tensions surrounding Iran, renewed discussions in regards to the broader economic impact of AI, and uncertainty about its potential Fed rate of interest cut in accordance with the newest inflation data.
Amid geopolitical tensions, inflows, particularly from exchange-traded funds (ETFs), remained negative. US-listed Bitcoin ETFs saw outflows for the fourth week in a row Last week alone, over $360 million was withdrawn. These outflows indicate a weakening of sentiment, as shown by CryptoQuant's Fear and Greed Index, which stands at 10 and is classed as extreme fear.
While the market has crossed into extreme fear levels, analysts consider BTC could extend its ongoing consolidation phase, with $60,000 seen as key support. However, further macroeconomic shocks are expected to push BTC price back towards the $50,000 threshold.
Which BTC investors are under stress?
During increasingly bearish periods, investors' actions and activities are crucial in assessing the present state of the market and its next possible direction. In one current evaluationAnil, an on-chain researcher and investor, has highlighted a key difference between short-term and long-term Bitcoin holders.
Given the present market situation Short-term BTC holders are in a period of stress driven by give up. Meanwhile, long-term Bitcoin holders have yet to undergo an actual stress or capitulation process.
This is value mentioning Long term owner Finally, in each cycle they undergo a period of capitulation, after which a brand new uptrend begins after an accumulation period. However, it’s difficult to predict whether the group will capitulate again this time. Should this occur, Anil noted that the world below 1 on the LTH unrealized profit/loss ratio chart could be the tipping point for the market.
BTC trading at $68,134 on 1D chart | Source: BTCUSDT on Tradingview.com
Featured image from Pixabay, chart from Tradingview.com
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