- Bitcoin trades at 97k and is broadly unchanged this week.
- Trump’s reciprocal trade tariffs have a delayed implementation.
- Hotter US inflation data hurt Bitcoin demand.
Bitcoin is trading quietly around 97k on Friday and is set for a muted weekly performance amidst a cautious market mood. Concerns over U.S. trade tariffs and sticky inflation have meant that demand for the cryptocurrency has remained limited and BTC remains below the 100k level.
Bitcoin has found little joy from the news that Trump’s sweeping reciprocal tariffs would have delayed implementation, giving time for negotiations. While treasury yields stalled and the equity market posted solid gains, Bitcoin failed to make any significant progress, continuing to trade within a holding pattern that it has traded within since mid-December.
With the prospect of reciprocal tariffs being applied in Q2, investors may remain cautious towards crypto. This caution has been evident in spot Bitcoin ETF flows this week, which have recorded outflows for four consecutive days, putting the cumulative net outflows week-to-date at almost $680 million, according to Coinglass data.
Inflation data this week has also been unsupportive. Hotter-than-expected CPI and PPI inflation prints have seen the market rein in Federal Reserve rate cut expectations further. The market only sees one 25 basis point rate cut this year, and that even isn’t fully priced in.
As trade tariffs and hawkish Fed worries offset the positives of a more crypto-friendly regulatory environment under President Trump and corporate buying, the question is whether the current consolidation structure is nearing an end.
Sentiment Analysis
The fear and greed index has only peaked once so far this year, with sentiment primarily neutral. Historically, there is a strong correlation between the Fear and Greed index and Bitcoin’s price. Sustained greed fuels rallies, as was the case with the December rally. However, the market still hasn’t shifted into extreme fear, which often signals a market bottom.
Is a Rise Above 100k on the Cards?
However, on-chain data suggests that selling pressure from short-term holders is easing. The volume of BTC spent at a loss by STHs has fallen to 3.8K BTC from 5.5K in early February. This brings the level closer to the yearly average of 3.5K. A slowdown in panic selling indicates market stabilization. Furthermore, as long-time holders remain primarily inactive, pointing to a stronger conviction, Bitcoin might find support around these current levels, potentially paving the way for recovery once sentiment improves.
Separately, on-chain transactions up to $10,000 typically associated with retail have steadied, falling just 2%, well below the 20% decline seen in January. Growth in monthly retail investor activity points to improving market sentiment, favoring near-term upside for BTC.
Finally, the MVRV (Market Value to Realized Value) ratio, which measures whether Bitcoin is over or undervalued relative to its historical performance, remains well below levels seen in prior bull cycles, suggesting that the world's largest cryptocurrency may still have upward potential.
Bitcoin Technical Analysis
Bitcoin continues to consolidate between 91.5k and 100k and is hovering around 97k at the time of writing. The price holds above the multi-month rising trendline.
Buyers need to rise above the 50 SMA and 100k to retest 106k. A rise above here creates a higher high, bringing 109.5k and fresh all-time highs into focus.
Should sellers, supported by the RSI below 50 take out the rising trendline support, this could open the door to 91.5k. A break below here is needed to create a lower low.
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