Following the sharp price movements experienced at the end of last week, Bitcoin (BTC) fluctuated today just above and below the $70,000 level.
Wide-ranging fluctuations exceeding 13 percent on a daily basis are undermining investor confidence, and a cautious atmosphere persists in the markets.
Bitcoin fell as low as $60,033 on Thursday, its lowest level since October 2024. However, it rebounded strongly on Friday, climbing back above $70,000. Despite this sharp pullback, traders remain cautious.
Chris Beauchamp, IG’s chief market analyst, noted that while cryptocurrency prices have recovered from last week’s lows, investors are not rushing to “buy cheap.” Beauchamp stated that the crypto market needs upward momentum, but despite the recent recovery, that momentum has not yet materialized.
Bitcoin volatility increased sharply during last week’s sell-off. The Bitcoin Volmex Implied Volatility Index surged above 97%, recording its largest intraday jump since the FTX exchange crash in 2022. This development indicates that market fragility remains high.
While high volatility in cryptocurrencies is nothing new, Bitcoin’s decline since its peak of $126,000 last October is noteworthy. This decline occurred despite a crypto-friendly White House administration and increasing institutional adoption. Furthermore, the failure of Bitcoin to function as a safe haven “digital gold” amidst rising geopolitical uncertainty raises further questions about this narrative.
However, there are some signs that optimism hasn’t completely disappeared. US Bitcoin spot ETFs saw net inflows of $221 million on February 6th. This suggests that investors are viewing the sharp sell-off as a buying opportunity.
Jeff Anderson, Head of STS Digital Asia, said they expect liquidity to decrease in the short term and nervous markets to generate larger price movements. According to Anderson, a potential pullback below $70,000 would be of limited importance; the real determining factor would be a sustained drop below $62,000 or a strong breakout above $76,000.
*This is not investment advice.
