Bitcoin’s valuation has taken a nosedive. This decline is largely spurred by escalating conflict in the Middle East and increasing fear surrounding the next Federal Open Market Committee (FOMC) meeting. The rising volatility and uncertainty that have taken hold of the market result in record day-to-day price swings. The leading digital asset has failed to hold its ground past the $106,000 support zone, raising alarms on its invertebrates.
Market Volatility and Price Movements
In many recent trading sessions, Bitcoin has experienced extreme intraday volatility. Its price has danced around the peaks and valleys of a high of $108,915 to a low of $105,486. Secondly, because the price has tested this key $106,000 support level several times and failed to close above it. Bitcoin is so hot it’s trading at $105,480. That represents just under a 2 percent decrease in value in the past 24 hours.
The escalating geopolitical calamity, especially that concerning Israel and Iran, has been one factor leading to the increased market turbulence. Investors have been eagerly latching onto these brewing developments, causing a surge in trading activity and volatility.
Holder Behavior and Profit Taking
In fact, recent data suggests that Bitcoin holders are starting to change their tune, as longer-term holders are starting to divest of their holdings. As Glassnode recently shared, wallets holding Bitcoin for over 1 year were the biggest profit takers during last week’s retracement. Bitcoin holders who bought 6-12 months ago would be sitting on an impressive $904m profit. Today’s amazing addition marks the second-largest daily increase in known profits since the beginning of this year. If this trend continues, it would represent a shift in market sentiment, as more investors choose to cash in on recent positive returns.
Crypto has been going nuts, and Bitcoin’s trading volume is up 25% over the last 24 hours. This spike further reflects the intensity and volatility of the current economic environment. The intersection of geopolitical tensions and this week’s FOMC meeting have made for a perfect storm for volatility.
Technical Analysis and Market Outlook
Bitcoin’s inability to hold a breakout above $106,000 could be an early sign of weakness to come. This unsuccessful bullish attempt could spell more bearish downtrend pressure on the price. According to popular Bitcoin analyst Willy Woo, Bitcoin has officially begun the late stage bull run phase. He supports this claim using his Risk Model.
The upcoming FOMC meeting and the follow-up speech by Federal Reserve Chair Jerome Powell are hanging over investor sentiment. The market is keen to understand the Fed's monetary policy plans, especially considering the impact of tariffs on the economy.
