Bitcoin Market Struggles Amid Geopolitical Tensions and Sell Pressure

By: Isha Das

Bitcoin's ambitious journey to break the $90,000 threshold encountered multiple challenges over recent weeks, highlighting the cryptocurrency market's sensitivity to broader geopolitical dynamics and internal market behaviors. Bitcoin briefly approached the coveted $91,000 mark but faced obstacles as the United States initiated military actions in Venezuela, stressing global financial uncertainties that reverberate through the crypto landscape.

This external geopolitical tension compounded the already fragile sentiment in the crypto markets. Historically, Bitcoin has been seen as a hedge against such geopolitical strife, yet the recent developments suggest a nuanced narrative. The instrumental timeline saw Bitcoin retreat below $90,000 as market participants reacted cautiously, digesting the broader implications for stability and security.

Amid these external pressures, Bitcoin closed the year with a slight decline, registering a ~6% annual drop, breaking its typical four-year green cycle pattern. Despite the modest nature of this decline, the shift indicates a transformation in market behavior. Data analyses from experts underscore this evolution, with emphasis on the role of aggressive sellers. Recent on-chain assessments indicate an uptick in sell-side pressures, which have begun overwhelming buyer demand. The cumulative net taker flow metric shows an increase in seller dominance, though still distant from a capitulation phase. This suggests that while the market is not in freefall, it is navigating a complex and selective phase that veers away from traditional growth cycles.

Moreover, Bitcoin’s current price around $90,000 is a critical battleground as it relates to its historical and anticipated market trajectories. Analysts underline that true bullish correction remains elusive unless Bitcoin surpasses the Short-Term Holder (STH) Realized Price at $99,000. This price point is crucial, serving as a benchmark of confidence and support, specifically among short-term investors who typically react swiftly to market movements. Until Bitcoin conclusively breaches this level, aided by convincing support from market liquidity and diminished sell pressure, optimism about a new enduring bull phase remains speculative.