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Crypto Market on Edge as Bitcoin Struggles Near $94K Amid Economic Uncertainty
The crypto market is facing a precarious situation, with Bitcoin trading near the psychologically significant $94,000 mark amidst growing economic uncertainty. As institutional investors buy Bitcoin aggressively, retail traders are panicking and selling their holdings, creating a chasm in sentiment that has led to intense volatility.
According to analysts at Bitwise, the current market dynamics are painting two vastly different pictures. On one hand, retail investors are exhibiting extreme fear, reacting to price swings with reckless selling. Conversely, institutional players perceive this turmoil as an opportunity to accumulate Bitcoin at discounted prices.
“Retail sentiment is unfavorable in crypto right now, and that signals potential for me,” Bitwise noted, suggesting that institutional accumulation could be a bullish indication for the market.
The introduction of tariffs by the Trump administration has contributed to the current market turbulence. The imposition of a 25% tariff on all steel and aluminum imports, as well as new levies on Canadian, Mexican, and 10% on Chinese goods, is fueling uncertainty across both traditional and digital markets. As analysts at QCP Capital put it, these trade restrictions are amplifying the overall sense of unease.
Furthermore, Federal Reserve Chair Jerome Powell reaffirmed the Fed’s “wait-and-see” approach to interest rate cuts, hinting at a slower pace in 2025. However, despite this hawkish stance, the U.S. Dollar Index (DXY) has weakened by 1.54% over the past month. Typically, a weakening dollar supports Bitcoin, but a tight monetary policy could limit liquidity, resulting in mixed signals for investors.
As of now, Bitcoin is trading at $94,672, having dropped 3% in the last 24 hours. The Relative Strength Index (RSI) has fallen below 50, indicating diminishing bullish momentum, while the 200-day moving average (MA) at $92,000 serves as a critical support level.
At present, the market is teetering on the brink of a decisive move. If Bitcoin manages to break above $98,500, it could trigger an ascent towards new highs. Conversely, if it falls below $94,000, we might witness another downturn toward $90,000 or lower.
The article was written by Mustafa Mulla
Source: coinpedia.org
