Bitcoin Defies Record Selling Pressure and Trade War Woes

Bitcoin has shown remarkable resilience, maintaining its position above $95,000 despite one of the largest selling events since the 2022 collapse of crypto hedge fund Three Arrows Capital (3AC). According to André Dragosch, head of research at Bitwise Europe, recent market data indicates that spot exchanges experienced their highest selling pressure since 3AC’s meltdown. However, Bitcoin’s price still hovers near the $100,000 mark, hinting at what Dragosch calls “seller exhaustion.”

Back in 2022, 3AC’s downfall triggered a wave of liquidations, taking down several major crypto lenders like BlockFi and Celsius. Yet, despite similar pressures today, Bitcoin remains resilient—an encouraging sign for investors eyeing stability in uncertain markets.

$93,000 Support Could Make or Break Momentum

Trade war tensions are rearing their head again, with the U.S. and China ramping up tariffs. These geopolitical concerns are weighing on market sentiment, making Bitcoin’s key $93,000 support level a key threshold. Ryan Lee, chief analyst at Bitget Research, warned that a drop below this level could result in over $1.7 billion in leveraged positions being liquidated, leading to further downside to $91,500 or even lower.

Investors are now waiting for the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping, which is aimed at resolving trade disputes. However, according to The Wall Street Journal, the meeting may be delayed, adding more uncertainty to the mix.

Markets Brace for More Volatility

The market isn’t out of the woods yet. Popular trader CrypNuevo pointed out that Bitcoin price action is hovering within a three-month trading range and could swing suddenly due to thin liquidity. Upcoming U.S. Consumer Price Index (CPI) data and testimony from Federal Reserve Chair Jerome Powell are expected to stir the pot this week.

Meanwhile, Fed policy remains a wildcard. The Kobeissi Letter highlighted that the U.S. Reverse Repo Facility (RRP) has dropped to its lowest level since early 2021. This could be a potential signal that the Fed’s quantitative tightening measures might be nearing an end. Moreover, this could trigger a liquidity shock that might significantly impact Bitcoin’s price.

Whales and Retail Investors Take Opposite Approaches

Investor behavior paints a fascinating picture. Retail investors—those holding less than 1 Bitcoin—are on a buying spree. They have been accumulating Bitcoin at a pace 72% faster than last year’s average, according to on-chain analytics firm Glassnode. In contrast, whales, or large holders, have been distributing their Bitcoin holdings at nine times the yearly average since Bitcoin crossed $100,000 in late 2023.

This divergence reflects conflicting outlooks on Bitcoin’s trajectory. Whales, often regarded as “smart money,” may be anticipating market turbulence, while retail investors appear optimistic, possibly banking on Bitcoin’s long-term potential.

Bitcoin’s Safe-Haven Status Faces Challenges

Despite being hailed as “digital gold,” Bitcoin has struggled to match the recent price surge in physical gold, which hit record highs near $2,900 per ounce. Peter Brandt, a seasoned trader, remarked that Bitcoin’s failure to capitalize on safe-haven demand amid trade tensions is “very interesting.” However, crypto entrepreneur Alistair Milne argued that Bitcoin could still play catch-up, noting its potential for higher returns compared to gold.

The crypto market remains a battleground of opposing predictions. Some analysts, like Abra CEO Bill Barhydt, foresee Bitcoin embarking on a long-term rally toward $700,000, driven by U.S. monetary policy shifts. Barhydt explained that potential tax cuts and liquidity injections to refinance trillions in U.S. debt could serve as a catalyst for this explosive growth.

At the time of writing, Bitcoin is sitting at $97,352.50.