In the past 72 hours, Bitcoin's price experienced a short-term drop due to increasing bearish pressure stemming from worsening geopolitical conditions.
Reasons for Bitcoin Price Drop
Market conditions for cryptocurrencies have worsened due to recent geopolitical events. Notably, Donald Trump's plans to impose unilateral tariffs and the escalation of the Israel-Iran conflict triggered a wave of selling. A sharp spike in sell volume occurred following Israel's military actions against Iran, impacting all high-risk assets.
Divergence Between Bitcoin Price and Binance Open Interest
Recent data reveals a significant divergence between Bitcoin's price and the open interest on Binance. As Bitcoin approached its record high of $110,000, the open interest failed to reach comparable levels, indicating weakening interest in futures trading.
Stablecoin Withdrawals and Their Market Impact
According to CryptoQuant, over $750 million in stablecoins has been withdrawn from derivative exchanges, which often indicates capital rotation or changes in trader behavior. This occurs as Bitcoin struggles near the important psychological level of $110,000.
Thus, geopolitical tensions and significant stablecoin withdrawals pose risks to Bitcoin's growth. Investors should proceed with caution and consider potential scenarios for further price declines.
