Bitcoin Holds Above $100,000 Amid Geopolitical Tensions and Fed Rate Pause

Bitcoin’s price has demonstrated notable resilience, maintaining a position above $100,000 over the past few weeks despite escalating geopolitical tensions in the Middle East. The question remains whether the cryptocurrency can sustain its value within the $100,000-$110,000 range, especially as the historical summer lull approaches.

Following the Federal Reserve's recent hawkish rate pause, neither bullish nor bearish sentiments have gained a clear advantage in the market. This uncertainty leaves room for speculation about potential market movements and the factors that could influence them.

Analysts from Swiss-based trading firm Swissblock and Bitcoin Vector researchers have noted that Bitcoin’s overall risk regime is currently low. According to their proprietary BTC risk indicator, the asset has been in a “low risk” regime since April. This period coincided with a rebound in the second quarter, where Bitcoin’s price surged from $75,000 to over $100,000, allowing bulls to maintain firm market control.

However, the analysts caution that if the indicator shifts to high-risk and the price dips below $100,000, the downward momentum could accelerate. They advise that if the price closes below $100,000, it could signal a bearish trend. Additionally, the analysts observed that Bitcoin’s price momentum has stalled and briefly dipped into the negative zone, putting bulls on notice.

Swissblock emphasized that a strong upward turn in momentum would be a bullish signal, but as of now, such a signal has not been observed. This cautious approach is also evident in the options market. Singapore-based crypto trading firm QCP Capital noted that the market is currently on “pause” and that a typical summer lull could drag markets down. The trading desk suggested that the market may be skewed towards downside risk protection for June and September tenors, indicating bearish undertones in the near term across the derivatives market.

Given the uncertainty and neutral to bearish Bitcoin projection by experts, the short-term price action could be driven mainly by a liquidation hunt. According to CoinGlass’s 30-day liquidation map, the key likely price magnets would be $111,000, $109,000, $103,000, and around $100,000. The nearest liquidity pool to the current price action was $103,000 and $100,000, hinting at a possible liquidity sweep lower before a potential hike towards $109,000 if market sentiment improves. There didn’t seem to be much liquidity below $100,000, suggesting that it could be the short-term support to watch.