Bitcoin Still at Risk of Lower Prices with Buyer Fear
By Martin Lam
Current Market Overview
The price of Bitcoin (BTC) is currently experiencing weakness, with buyers exhibiting fear of potential liquidation events. The BTC/USD pair has shown a series of four consecutive red candles, indicating a bearish trend, and the current week is also reflecting negative performance. Analysts suggest that stronger support may emerge around the $54,000 mark.
Recent Price Movements
Bitcoin's decline has persisted since a significant market rout in October, which resulted in approximately $19 billion in liquidations. A failed breakout attempt at $92,000 in early January has further contributed to the selling pressure. Following a brief lift to $69,000 after the US Consumer Price Index (CPI) data fell short of expectations, the overall sentiment remains cautious.
Impact of Economic Indicators
The Bureau of Labor Statistics reported that the core CPI matched estimates at 2.5%, while the broader reading was slightly lower at 2.4%. Despite this, the market's expectations regarding interest rate cuts have not shifted significantly, and ETF flows into Bitcoin remain weak. Notably, corporate investments have not provided the expected support for Bitcoin prices.
Corporate Investments and ETF Holdings
Recent data indicates that Abu Dhabi wealth funds, including Mubadala Investment Company and Al Warda Investments, have increased their holdings in BlackRock’s iShares Bitcoin ETF (IBIT) to over $1 billion by the end of 2025. However, this has raised concerns among analysts regarding the anticipated boost from corporate buying flows.
Robert Mitchnick, head of digital assets at BlackRock, commented on the misconception that hedge funds utilizing ETFs are contributing to market volatility and heavy selling. He emphasized that IBIT holders are primarily viewing their investments as long-term commitments.
Future Outlook
The current trend for Bitcoin remains weak until there is a significant change in market sentiment. Potential catalysts for a shift could include large-scale buying from institutional investors, such as the US Strategic Reserve, although current investments have been subdued. Additionally, tax refunds for US investors may encourage retail risk-taking by late March, potentially injecting fresh capital into Bitcoin and technology stocks.