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Bitcoin's Bull Run Stalls: Bottom Not Yet in Sight

Coin WorldWednesday, Feb 5, 2025 8:06 am ET

1min read

Bitcoin's Price Trajectory: Why the Bottom Hasn't Been Reached Yet

Bitcoin's remarkable bull run, which propelled it above $100,000, appears to be slowing down. Analysts have identified several red flags that could curb its momentum, including tightening liquidity, mixed signals from the Trump administration on a Bitcoin reserve, and a bearish technical pattern reemerging on the charts.

Global liquidity is shrinking, with the U.S. Treasury's cash balance surging to $800 billion. Instead of injecting more dollars into the economy, the Treasury has tightened its grip following the recent debt ceiling showdown. Reduced liquidity often spells trouble for risk assets like Bitcoin, making market conditions less favorable for big price moves.

The Trump administration is now playing it safe, saying it will "evaluate" the feasibility of a strategic Bitcoin reserve instead of committing to it. This delay has led to a swift reaction from the market, with Bitcoin slipping to $96,000 overnight after the administration's crypto czar confirmed the delay on CNBC.

On the technical front, Bitcoin's 14-week Relative Strength Index (RSI) has formed a bearish divergence, echoing the setup from the 2021 market peak. Back then, a similar signal preceded a significant downturn. For now, Bitcoin's price remains stuck between $90,000 and $100,000. Analysts warn that without renewed bullish momentum, BTC could correct below $90,000, triggering large liquidations across exchanges.

Whether Bitcoin breaks out or faces a deeper correction may hinge on global economic developments and U.S. policy shifts in the coming weeks. At the time of writing, the market remains uncertain about Bitcoin's price bottom.

The cryptocurrency market remains in a state of flux as Bitcoin's Long/Short Ratio indicates that a price bottom has not yet been reached. Over the last week, Bitcoin has recorded a slight decline of 0.88%, reflecting its struggle within a tight consolidation range. "Since no crossover has occurred, it suggests that investors are still more confident and bullish on altcoins than Bitcoin," states Alphractal.

Market analysis emphasizes that the price bottom for Bitcoin has yet to arrive, owing to the lack of a

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