On February 2, Bitcoin’s price dropped to $96,821, influenced by US-Canada trade tensions, causing a 3.3% decline in market cap. Despite these challenges, long-term holders are retaining their positions, suggesting a potential rebound. Key support levels and momentum indicators will determine Bitcoin’s near-term recovery prospects, amidst broader market anxieties.

On February 2, Bitcoin’s price fell to a 14-day low of $96,821 amid market reactions to escalating trade tensions between the US and Canada. This 3.3% decline eliminated over $600 million from Bitcoin’s market capitalization as investors navigated macroeconomic risks. Despite these challenges, on-chain data indicates that long-term holders retain their positions, possibly setting the stage for a rebound in the near term.

The cryptocurrency market reacted negatively as the US-Canada trade war concerns surfaced, driving Bitcoin prices lower. Following the previous high of over $105,000 after the Federal Reserve’s pause on interest rates, Bitcoin’s bullish momentum has stalled. The ongoing tariff disputes ignited fears of a lengthy trade battle between these economically significant nations, contributing further to Bitcoin’s decline.

Despite the substantial drop, certain metrics reveal that long-term holders of Bitcoin remain undeterred. This group appears less troubled by short-term volatility, as they continue to hold their assets. Historical trends indicate that when such holders show conviction, it may precede market recoveries, with speculations that increasing geopolitical tensions could push more institutions toward Bitcoin as a safeguard against currency instability.

Currently, Bitcoin is trading around $98,500 after this recent decline. The Donchian Channel indicates a consolidation phase for Bitcoin, with existing support at $94,346 and resistance at $109,588. Should Bitcoin stabilize above $96,000, it could signify a potential short-term recovery; however, continued observation of market momentum is crucial.

If Bitcoin’s price fails to hold above $96K, it may face additional downward pressure, potentially leading to further losses approaching $94K. Conversely, should it recover and reach the mid-range target of $101K, this could reaffirm bullish sentiment and open the path for testing higher thresholds, such as the psychological $105K mark.

The sharp fluctuation in Bitcoin’s price is tied to macroeconomic factors, notably the trade tensions between the US and Canada, which have historically unsettled financial markets. With implications on cryptocurrency valuations arising from such geopolitical issues, investors are particularly keen on indicators that track the behavior of long-term holders. Market sentiment can shift rapidly based on regulatory changes and international disputes, necessitating a close examination of Bitcoin’s on-chain metrics for forecasting future movements.

In summary, while Bitcoin’s price has recently declined to a low of $96,821 due to external market pressures, the resilience of long-term holders suggests potential for recovery. Increased geopolitical tension and global economic considerations may further influence cryptocurrency dynamics. Maintaining a price above critical levels is essential for renewed bullish sentiment, while the response from institutional investors amidst these challenges remains pivotal for Bitcoin’s trajectory moving forward.

Original Source: coingape.com

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