Bitcoin Drops 2% to $98,000 Amid Geopolitical Pressures

Bitcoin's price experienced a brief decline to a local low of $98,000 before rebounding to $101,000 over the past day. This price movement was primarily driven by geopolitical pressures, leading investors to engage in aggressive selling. According to CryptoQuant’s analyst Axel Adler, the market saw significant selling activity, with 14,700 BTC sold at a loss as the price dropped below $100,000, indicating panic selling. Additionally, 3,100 BTC were sold for a profit on centralized exchanges, resulting in short-term holders realizing a total of 17,800 BTC, with net capitulation amounting to 11,600 BTC.

This surge in selling reflects a sudden shift in investor sentiment, as concerns intensified. Consequently, Bitcoin’s Advanced Sentiment Index dropped to -20%, signaling rising bearish pressure. Bearish sentiment reached its highest level in a month, with selling pressure intensifying as the negative delta in Taker order volume deepened, highlighting growing seller dominance. This shift coincided with Bitcoin’s drop below $100,000. As Open Interest declined, traders were forced to unwind leveraged positions, leading to a spike in liquidations. Notably, 2,600 BTC in long positions were wiped out, signaling heightened market stress.

The shift in the derivatives market indicated mounting investor concerns. However, sentiment began to recover as BTC reclaimed the $101,000 level. The Advanced Sentiment Index rose from -20% to 37%, and the Volume Delta softened, hinting at stabilizing conditions. Despite this, the Volume Delta remains in bearish territory, suggesting only partial recovery. Investors appear to be cautiously buying oversold positions, aiming to capitalize on the pullback. This partial buying activity is evident as Exchange Netflow has turned negative once again, sitting around 1,800 at press time, indicating that buyers have returned and bought recently oversold positions.

Despite signs of potential recovery, caution remains in the market due to the possible escalation of the Middle East conflict. The recent market drop and increased selling came amid U.S. strikes on three Iranian targets, placing markets on high alert over possible escalation. If geopolitical tensions ease, a full recovery appears likely, with buyers returning and Bitcoin aiming to reclaim $104,238. However, if the conflict intensifies, sentiment may sour further, leading to another decline. In that case, BTC could find support near $97,766.