Bitcoin price performance is a critical factor in the cryptocurrency market, and its moves alone could decide the trajectory of the entire market. Ever since it created an ATH in mid-January, the BTC token has been continuously consolidating despite Blackrock buying news. BlackRock added $30M worth of BTC just yesterday, but its aftereffects are still missing. Let’s discuss what’s happening and the factors behind this BTC’s stagnant price.
BlackRock Buys $30M BTC, But Bitcoin Price Unaffected
The renowned spot Bitcoin ETF provider added $30M worth more BTC to its holdings, bringing the total to $2.3 billion-plus, per Arkham Intelligence. The previous week, the firm bought $1B worth of BTC, increasing institutional demand for the token. Moreover, its CEO Larry Fink predicted that Bitcoin price will surge to $700,000 past this buying sprint, boosting investor confidence.
I was with a sovereign wealth fund during this week and that was the conversation. Should we have a 2% allocation? Should we have a 5% allocation? If everybody adopted that conversation, it would be $500,000, $600,000, $700,000 per Bitcoin.
However, despite that, the Bitcoin price remains unaffected. It trades at $102.6K and has dropped 0.2-0.3% daily, compared to 2% on the weekly charts. More importantly, the 24-hour trading volume dropped 33%, indicating declining investor confidence. So let’s discuss the reasons behind that.
5 Factors Behind Bitcoin Price Consolidation
In the current situation, the FOMC meeting, a lack of bullish sentiment among investors, and many other factors are behind Bitcoin’s ongoing behavior. However, these barriers are undoubtedly temporary, as the power law model presents the token on the right trajectory, with the BTC price potentially hitting $200k by 2025 end.
1. FOMC Meeting & Interest Rate Cut
The US Federal Open Market Committee (FOMC) is meeting today to discuss interest rates. Every time this meeting happens, experts speculate about rate cuts, fueling bullish sentiments. However, this time, the CME data suggest unchanged interest rate odds, keeping the market subdued. Such macroeconomic events always influence digital asset prices and investor sentiments.
2. Investors Missing FOMO Sentiments
FOMO is the biggest contributor to token rallies, showing investors enthusiasm. It is also a key indicator and is proportional to the UTXO (younger unspent transaction outputs). This peaks during the bull run and has peaked in 2013, 2017, and 2021. However, the UTXOs are nowhere near their peak in the present. Although it has increased, it has not reached the top, which represents that the speculative frenzy needed for a sharp uptrend is missing despite new participants. Moreover, the long-term holders maintained their holdings, aiding in the consolidation trend.
3. New holders Low Bitcoin Holding Impacting Price Trajectory
Coinciding with the FOMO factor, another significant factor behind the consolidation of Bitcoin prices is the low holding proportions of new investors. According to the Glassnode data, the BTC holding for 24 hours to 3 months is just 50.2%, which is much lower than the 2018 (85%) and 2021 (74%) peaks.
It clearly represents the new investors lacking confidence in the asset, stopping the bullish uptrend.
4. DeepSeek & Liquidation Event Impacting Investor Sentiments
The popular AI model, DeepSeek’s introduction, is behind the recent stock market crash, wiping more than a billion from the market. Its impact was seen in the crypto market, crashing all the digital assets at the same time. The continuity of the crash today liquidated $290.63 million from 132,414 crypto traders.
In this, Binance witnessed the largest single liquidation, costing $15.17M, which shook investor confidence despite BlackRock BTC buying. In such a situation, investors become cautious, reducing market activity. More importantly, they wish to take smaller risks, usually in meme coins or low-cap altcoins.
5. Capital is Stuck in Altcoins
In a riskier market, crypto investors tend to invest in less risky assets like meme coins. In other words, the altcoin explosion, especially as new meme-themed cryptocurrencies launch on the pump.fun increased, diverting the investment and reducing the impact on a singular asset, let alone Bitcoin. A recovery in investors’ sentiments and an update regarding the Bitcoin reserve could fuel its rally.
Conclusion
BlackRock Bitcoin buying is a significant factor that builds its institutional demand. More importantly, this is building support for long-term growth. However, macroeconomic events and market behaviors are restricting the recovery of BTC price. Once the market dynamics begin to evolve, with bullish investor sentiments, the Bitcoin price could move out of the consolidation phase.
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