Bitcoin Price Analysis: BTC Back Above $96,000 After Substantial Tuesday Drop

Bitcoin (BTC) is showing considerable resistance during the current session, with the price up nearly 1% during the current session and trading just above the $96,000 level. 

BTC saw a sharp decline on Tuesday as sellers drove the price to an intraday low of $93,430 before recovering and settling at $95,634. 

Bitcoin (BTC) Dips Below $95,000 As Odds Of Strategic Reserve Dwindle 

Bitcoin registered a sharp drop on Tuesday, dropping below $95,000 to an intraday low of $93,430 as odds of a strategic reserve dropped on Polymarket. The flagship cryptocurrency has been declining since setting a new all-time high of $109,114. A poll on Polymarket placed the odds that Donald Trump will create a strategic Bitcoin reserve within the first 100 days of taking office dropped to 12%. The odds of a Bitcoin reserve have been on a downward trend since peaking at 40% in January. Another poll about the likelihood of the Texas Strategic Bitcoin Reserve Act being signed this year dropped to 38% from over 60%. 

Probabilities have remained low as the state senate conducts hearings about establishing a reserve, interviewing experts and the state comptroller. Several other states, including Wisconsin, Arizona, Florida, Alabama, and Wyoming, have introduced bills to create a strategic reserve. The Trump administration is still deliberating on creating a strategic Bitcoin reserve, with David Sacks, White House crypto and AI czar confirming discussions are ongoing. 

Are Investors Turning Their Back On Bitcoin?

According to data from Farside Investors Ethereum ETFs in the US have registered a cumulative net inflow of nearly $400 million. The figure is over seven times larger than the inflows registered in January. Additionally, the funds experienced outflows on only two trading days. In comparison, Bitcoin ETFs have registered a net outflow of $376 million, with bearish sentiment dominating the asset. The funds have registered inflows on just four trading days. The switch to ETH is due to carry trading, which involves the purchase of spot ETFs while shorting ETH CME futures. Inflows into ETH can also be bullish direction plays. However, the investor pivot to ETH is yet to translate into a price jump for the asset. 

However, analysts expect a price increase driven by Ethereum’s upcoming Pectra upgrade. Pectra will optimize Ethereum’s execution and consensus layers, helping it compete against rival networks like Solana. 

“ETH has a solid foundation for a resurgence. The Pectra upgrade, scheduled for April 8 for example, is bringing network improvements, faster transactions, and better staking mechanics.”

Strategy To Raise $2 Billion To Buy More BTC 

Strategy plans to raise $2 billion through 0% senior convertible notes to purchase more BTC. Initial note buyers will get the chance to acquire an extra $300 million worth of notes beginning five days after their issuance. 

“Strategy (Nasdaq: MSTR) today announced that it intends to offer, subject to market conditions and other factors, $2.0 billion aggregate principal amount of its 0% convertible senior notes due 2030 (the “notes”) in a private offering to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).”

Senior convertible notes act as debt instruments, offering equity conversion rights to holders and granting them senior status over common stock during bankruptcy proceedings and liquidation events. Strategy currently holds a staggering 478,740 BTC, making it the world’s largest corporate holder of the asset. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) has traded between $94,000 and $100,000 for over two weeks, remaining in a consolidation phase. The flagship cryptocurrency faces several hurdles that have weighed on investor sentiment and kept prices lower. BTC dipped sharply on Tuesday as it fell to a low of $93,430 before recovering to close above $95,000. According to analysts, the drop was a knee-jerk reaction to the news that FTX has begun repaying customers with account balances of $50,000 or less. The defunct exchange also announced that repayments to customers with account balances over $50,000 will start on May 30. 

The exchange began repaying creditors on Tuesday, with claims of under $50,000 receiving funds through Kraken and Bitgo. 

“FTX USERS RECEIVING FUNDS Users with FTX claims of under $50,000 have started to receive funds today through distribution providers Kraken and Bitgo. This wave of creditors represents approximately $1.2B in value.”

Additionally, Bitcoin volatility has hit multi-month lows. A report by K33 Research highlighted that volumes, yields, options premiums, and ETF flows have moved to levels not seen since before the US elections. According to the report, as of February 13, 37% of the top US companies exhibited greater 30-day volatility than BTC. A K33 Research analyst stated, 

“Extracting meaningful insights from the current market remains challenging, as Bitcoin remains range-bound with declining activity and yields.”

The analyst added there were no clear catalysts in sight, indicating that price action could remain muted. CryptoQuant has noted that BTC is flowing out of derivative exchanges and going into spot exchanges, suggesting the beginning of a bearish phase. Outflows from exchange-traded products suggest a cautious market. Bitcoin ETPs registered outflows of over $430 million during the previous trading week, triggered by macroeconomic concerns, an escalating trade war, geopolitical tensions, and a hawkish Federal Reserve. 

BTC started the previous week with an increase of 0.98%, moving to $97,468. It attempted a move past the 50-day SMA on Tuesday but fell short, dropping nearly 2% after reaching an intraday high of $98,497 and settling at $95,800. The flagship cryptocurrency plummeted to an intraday low of $94,118 on Wednesday as bearish sentiment intensified. However, it recovered from this level to register an increase of 2.17% and settled at $97,881. Despite a positive showing on Wednesday, BTC was back in the red on Thursday, dropping 1.24% to $96,663.

Source: TradingView

BTC’s seesaw price action continued on Friday as it surged to an intraday high of $98,929. However, it could not stay at this level and ultimately settled at $97,566 after an increase of nearly 1%. Buyers retained control on Saturday, and BTC registered a marginal increase, moving to $97,705. However, sentiment changed on Sunday as BTC dropped 1.51% to settle at $96,225. The current week began with buyers retaining control as the price slipped below $96,000 to $95,767. BTC experienced volatility on Tuesday as it fell to an intraday low of $93,430 before recovering and settling at $95,634. The current session sees BTC up nearly 1% as buyers look to build momentum and move towards $100,000.

BTC is struggling to build momentum and move past key resistance levels and moving averages, indicating low demand at higher levels. BTC must reclaim $100,000 for bullish sentiment to return. A move past this level could push the price towards $105,000 and potentially retest its all-time high. However, if sellers take control, BTC could drop to $90,000, with a break below this level leading to a significant correction.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.