Bitcoin Wobbles – Experts Sound the Alarm

In recent months, Bitcoin has dominated the financial landscape, experiencing substantial price swings and market fluctuations.

While many investors remain bullish, a growing number of experts have expressed skepticism, pointing to macroeconomic conditions, market sentiment, and technical indicators as cause for concern.

These dissenting voices offer a more tempered perspective on Bitcoin’s future, urging caution amid the optimism.

Market Dominance and Economic Headwinds

Bitcoin’s market dominance has surged past 60%, even as altcoins struggle under selling pressure. According to Brave New Coin, Bitcoin declined by approximately 7.3% over the past week, yet it performed better than major alternative cryptocurrencies such as Ethereum, XRP, and Solana, which saw steeper losses. Analysts attribute this trend to investor flight from riskier assets following U.S. President Donald Trump’s recent tariffs on imports from Canada, Mexico, and China.

Bitcoin has dropped under $100,000. Source: BNC Bitcoin Liquid Index

Amid this backdrop, financial markets are navigating a climate of uncertainty. The imposition of tariffs has heightened inflationary fears and led investors to seek safer assets such as U.S. government securities. Crypto trader and analyst Ran Neuner has warned that U.S. futures market movements could trigger another decline in digital assets.

Source: Ran Neuner

Meanwhile, BitMEX co-founder Arthur Hayes has predicted a broader crypto sell-off, arguing that initial optimism surrounding Trump’s pro-crypto stance may dissipate as traders realize that legislative changes will take time.

Bearish Signals and Market Volatility

Bitcoin’s price trajectory remains volatile, with analysts split on its short-term direction. Ryan Lee, chief analyst at Bitget Research, has forecasted a potential price correction to $95,000. He points to macroeconomic factors—including labor statistics and Federal Reserve policy—as critical in shaping Bitcoin’s price movements in the coming weeks. Lee notes that the market is at a pivotal moment, with the $95,000 level acting as an essential support range.

Further complicating market dynamics is the emergence of DeepSeek R1, a Chinese-developed open-source AI model. The release of DeepSeek has been characterized as a black swan event, triggering instability in global financial markets. The Trump administration is now considering additional restrictions on Nvidia’s technology exports to China, adding another layer of uncertainty to the economic landscape. Analysts have linked these macroeconomic tensions to Bitcoin’s recent fluctuations, warning of continued instability ahead.

Technical Analysis and Market Patterns

A growing number of analysts caution that Bitcoin may be entering a “bear trap,” a scenario in which a temporary price decline leads traders to panic-sell before a potential market rebound. Despite closing above $100,000 for the first time in history in January, Bitcoin’s recent dip below this psychological level has raised concerns. Some, like Swyftx lead analyst Pav Hundal, suggest that the market’s volatility resembles levels last seen around the U.S. election period, a time of heightened investor uncertainty.

According to technical indicators, Bitcoin faces critical resistance levels between $103,000 and $108,500. Crypto analyst EGRAG CRYPTO has highlighted repeated tests of the $90,000 support level, warning that a break below this threshold could trigger a significant price drop. If Bitcoin falls beneath $87,000, it could face an accelerated sell-off, potentially leading to a deeper decline toward $75,000.

Source: Crypto Analysis EGRAG

Institutional Influence and Regulatory Concerns

The role of institutional investors in Bitcoin’s trajectory cannot be ignored. Major players, including BlackRock, have significantly increased their exposure to Bitcoin derivatives, fueling speculation that cryptocurrency is moving further into the mainstream. However, with increased institutional involvement comes greater market vulnerability. Financial bubbles, reminiscent of the dotcom era, could pose systemic risks if speculative interest drives asset prices far beyond their intrinsic value.

Former Securities and Exchange Commission (SEC) chair Gary Gensler’s resignation has also raised concerns about future regulatory oversight. Trump’s anticipated nomination of Paul Atkins, a known crypto advocate, to the SEC has divided opinion. While some investors welcome a lighter regulatory touch, others worry that reduced oversight could leave the market susceptible to manipulation and speculative bubbles.

Looking Ahead: What Comes Next for Bitcoin?

Despite bearish projections, Bitcoin’s long-term prospects remain a point of debate. The cryptocurrency recently achieved its highest monthly close on record, surpassing $102,000. Some market observers believe the current downturn is temporary and that Bitcoin will reach new all-time highs before the end of Q1 2025.

A key factor influencing Bitcoin’s future is the U.S. government’s potential adoption of a Strategic Bitcoin Reserve (SBR). Senator Cynthia Lummis has championed the initiative, arguing that acquiring Bitcoin reserves could offer financial security against mounting national debt. If implemented, an SBR could reduce Bitcoin’s circulating supply, driving prices higher.

At the same time, Bitcoin’s near-term trajectory remains uncertain. ETF inflows, Federal Reserve decisions, and macroeconomic developments will all play pivotal roles in shaping market sentiment. It’s even possible that Trump will perform the ultimate magic trick, and use tariffs to transform the American economy and drive the price of Bitcoin up.