The report indicates that Bitwise’s own Cryptoasset Sentiment Index has soared to its highest level since May, signaling a bullish sentiment. This surge is a result of an influx of capital into exchange-traded products. The total net inflows into global Bitcoin ETPs have reached a record high of $14.3 billion this year, with the last five sessions contributing another $2.2 billion, equivalent to roughly 20,763 BTC.

Why the sudden shift towards risk? Bitwise attributes this to a reduction in macro uncertainty. New US trade agreements with Canada could be finalized in July, and the US and Iran have adopted surprisingly reconciliatory tones. Additionally, Federal Reserve Chairman Jerome Powell has linked the resumption of rate cuts to progress in tariff talks, opening the possibility of a looser policy in the coming weeks.

According to Bitwise, this combination of declining geopolitical risks, uncertain trade policy, and potential monetary policy stimulus should continue to improve market sentiment and provide a significant boost for Bitcoin and other cryptocurrencies.

On-chain data also seems ready for a surge. Large-volume Bitcoin wallets withdrew 8,740 BTC from exchanges last week, exchange reserves dropped to 2.898 million BTC, and net selling pressure on spot venues decreased from $2.2 billion to $0.5 billion.

While derivatives present a more complex picture, with futures open interest dropping by 20,000 BTC and bearish perpetual funding rates hinting at a lingering short bias, options markets show traders quietly retracting.

Bitwise concludes that as long as geopolitical détente, trade breakthroughs, and an accommodating Federal Reserve coincide with continuous ETF inflows, global risk appetite is likely to return decisively, keeping Bitcoin on an upward trajectory. At the time of writing, Bitcoin is trading at $106,840.

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1. Bitcoin traders brace for further lows: Exchange order book liquidity indicates a potential dip towards the $90,000 mark. The recent upheaval in the Middle East has initiated swift reactions across cryptocurrency, oil, and stock futures. Yet, market analysis hints that no “long-term conflict” is being factored into prices.

2. A testing week for the US Federal Reserve: The inflation gauge favored by the Fed will be closely watched, following Chair Jerome Powell’s two-day testimony to lawmakers. Bitcoin dominance is inching towards the typical reversal point, possibly triggering an “altseason”.

3. Liquidity suggests possible new lows for Bitcoin: Bitcoin recently hit its lowest level since early May, before sealing a weekly close around $101,000. However, traders are predicting that the next support retest could plunge deeper, possibly towards the $95,000 mark.

4. Markets ignore potential “long-term conflict” in the Middle East: Despite the recent developments in the Israel-Iran conflict, market participants appear to be anticipating a short-lived war. Amidst tariffs, wars, Fed decisions, recession concerns, and inflation data, the market is arguably noisier than ever.

5. Pressure on Fed’s Powell mounts ahead of PCE release: The Federal Reserve’s inflation gauge, the Personal Consumption Expenditures (PCE) index, is due for release on June 27. This comes at a crucial time for the Fed, under increasing pressure over interest rates from US President Donald Trump.

Please note: This article does not offer investment advice. Every investment and trading move involves risk. Always conduct your own research before making a decision.

The post Bitcoin’s Potential Plunge to $92K: Five Key Points to Consider This Week appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

Despite short-term volatility, Cyclop’s comprehensive analysis paints a more hopeful picture for the future of the broader crypto industry.

Cyclop recently shared on X (previously known as Twitter) that historical data suggests geopolitical unrest frequently precedes bullish trends in cryptocurrency. Referring to specific events from April and October 2024, he highlighted that Bitcoin (BTC) initially fell by 18% and 10% respectively amidst these conflicts, before bouncing back with remarkable gains of 28% and 62% soon after.

He reasons that these patterns represent a recurring cycle where conflict-related dips in crypto prices ultimately give way to significant growth. His argument is backed up by the below chart.

While geopolitical tensions may instigate short-term bearish movements, the overarching influence appears to be beneficial for digital currencies. Cyclop argues that as conflicts stoke fears of inflation and instability, traditional finance investors increasingly turn to crypto as a safeguard against weakening fiat currencies.

Unlike regular bank accounts, cryptocurrencies are immune to freezing, a factor that makes them attractive during periods of geopolitical turbulence. Digital currencies are increasingly being considered as a form of “digital gold,” a safe harbor in stormy times.

Current market dynamics mirror past events like the Russia-Ukraine conflict and US-Iran tensions in 2020, which also witnessed temporary declines followed by recoveries. Cyclop maintains that the current situation will result in similar outcomes, despite the usual summer lull in market activity.

Bullish sentiment is also supported by positive macroeconomic factors. Recent developments suggest that the US and China are working towards a compromise to ease tariffs and stabilize global supply chains, a move expected to temper inflation and boost investor confidence.

Moreover, the decision by President Donald Trump to postpone new tariffs has created a more risk-friendly atmosphere, enabling liquidity to circulate back into crypto markets. The latest CPI report, which showed a modest month-over-month increase of just 0.1%, further fortifies this positive outlook.

With annual inflation at 2.4%, slightly lower than the projected 2.5%, the Federal Reserve is now expected to cut interest rates twice by the end of the year. Historically, such rate cuts have been bullish for cryptocurrencies as they often lead to increased liquidity in the markets.

Although the immediate aftermath of the Israel-Iran conflict may pose challenges, historical data suggests that cryptocurrencies possess the potential to prosper in such conditions.

The post War’s Unexpected Impact on Crypto: Analyst Forecasts Bullish Future Amid Global Tensions appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

“Bitcoin’s price took a hit of 4% due to geopolitical instability, such as the recent Israeli strikes on Iranian nuclear sites, indicating Bitcoin’s susceptibility to risk-off events,” commented Rachael Lucas, a Crypto Analyst at BTC Markets. “However, it usually bounces back quickly as investors utilize it as a geopolitical hedge.”

Lucas further explained that Bitcoin’s price movement is currently influenced by a mix of institutional flows, macroeconomic data, and geopolitical risks. The crypto’s fear and greed index presently stands at a moderate 61, symbolizing a cautiously optimistic investor sentiment.

Vincent Liu, CIO of Kronos Research, amidst the current geopolitical tension, sees robust global liquidity and institutional demand that could pave the way for a breakout once the situation calms down. Bitcoin ETFs witnessed monthly net inflows of $5.23 billion last month, similar to levels seen around the time of U.S. President Donald Trump’s election that sparked a bull run in the crypto market.

“The successful breach of resistance at $106,406 indicates ongoing bullish momentum, with the next significant target being the all-time high,” Lucas noted. In the meantime, Ether’s price increased by 1.48% in the past day, trading at $2,569. Analysts noted that Ether has been gaining institutional momentum that could be further spurred by catalysts like DeFi summer.

This week’s mega-event is the Federal Open Market Committee Meeting on Tuesday and Wednesday, which could significantly influence BTC and ETH prices, according to Liu. CME Group’s FedWatch Tool predicts a 96.7% chance that the Fed will keep its current interest rate of 4.25% to 4.50%. However, President Trump has been urging Fed Chair Jerome Powell to slash rates by a full percentage point, hinting at potential intervention if it fails to happen, as per the Financial Times.

Beyond the interest rate decision, any announcements related to ETFs or stablecoins from the Securities and Exchange Commission and the Treasury could sway market sentiment and inflows, analysts warned.

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