Bitcoin has entered bear territoriy, down 25% from its all-time high as macroeconomic uncertainty and political factors are spooking investors.
Speaking on Bloomberg TV, crypto reporter Emily Nicolle argued that Bitcoin (BTC) is “still a very risk-on asset” that is highly correlated to shifts in the macroeconomic landscape. As such, what happens on Wall Street will be play out in Bitcoin.
The downturn is also fueled by setbacks within the crypto industry, notably Bybit’s $1.5 billion hack last week has resulted in a “rough period” for the sector.
Political uncertainty is another factor, she said. Some investors had been hoping for clearer regulatory developments from the Trump administration, but those expectations remain unmet. She said:
“Some of the things Trump promised to do on the campaign trail have not yet come to fruition, and those are the catalysts we are looking to as potential upsides for Bitcoin.”
Where does crypto go next?
Investors are closely watching the $70,000 level as a key psychological and technical support zone.
“If it continues to go down, then that is the next point where we will start to think, ‘OK, that’s where a lot of the risk is happening,’” Nicolle explained.
She also pointed out that options markets are heavily concentrated around this threshold, meaning a break below could trigger further selling pressure.
Meanwhile, the broader cryptocurrency market has suffered alongside Bitcoin. Altcoins are “all suffering too, as to be expected,” she said. In fact, some coins face higher selling pressure.
Solana (SOL) has been particularly hard hit following a meme coin scandal tied to Argentina’s president. Meanwhile, Ethereum (ETH) selling pressure can be attributed to its association with the $1.5 billion hack.
“Without any potential upside, Bitcoin is the tide that lifts all boats. If Bitcoin struggles, other cryptocurrencies tend to be hit even harder,” Nicolle noted.
Next move for Bitcoin
Bitcoin’s next move will depend on macroeconomic conditions and regulatory developments. If the Trump administration introduces reasonable stablecoin legislation or any form of pro-crypto policies, Bitcoin’s recent oes could “be a boon for Bitcoin,” she argued.
“But if things don’t move forward, and markets improve elsewhere, Bitcoin will likely continue to struggle.”
Read the full article here