Key Points
- Bitcoin’s price experienced a short-term correction, dropping to around $91K.
- Despite the bearish outlook, BlackRock’s iShares Bitcoin Trust (IBIT) continues to buy more Bitcoin.
Bitcoin’s price took a bearish turn on Tuesday after failing to break above $102K in the previous two days. The leading cryptocurrency fell by over 3% in the last 24 hours, trading around $97,672 on Wednesday, February 5, during the mid-London session.
The increased volatility in the crypto market led to more than $357 million being liquidated in the past 24 hours, of which over $88 million was Bitcoin.
Bitcoin’s Short-term Prospect
The possibility of Bitcoin’s price dropping in the short term has increased. The Bitcoin fear and greed index, which was over 72% earlier this week indicating extreme greed, has fallen to around 54% on Wednesday, suggesting neutrality. According to data from Santiment, Bitcoin’s daily active addresses fell from over 790K on Tuesday to about 224k earlier today.
BlackRock’s IBIT Buys Bitcoin Dip
BlackRock Inc’s iShares Bitcoin Trust (IBIT) has been purchasing more Bitcoin, despite the short-term bearish outlook. The asset management giant, which manages over $11 trillion, believes in Bitcoin’s potential as a hedge against inflation and macroeconomic uncertainty.
On Tuesday, IBIT saw a net cash inflow of about $249 million, bringing its total net assets to about $57 billion. Meanwhile, the net cash inflows to the US spot Bitcoin ETFs on Tuesday were about $340 million, with no issuers registering net cash outflows.
Bitcoin’s Price Action
Bitcoin’s price has been trading within a horizontal channel for the past three months, in anticipation of the exciting phase of the 2025 macro bull run. However, the coin has been caught in a short-term correction towards the lower border of the horizontal channel.
After retesting a key support level above $91.5K, Bitcoin’s price has shown signs of another retest before rebounding in the near future. This short-term bearish sentiment will be invalidated if Bitcoin’s price consistently closes above the falling logarithmic trend and regains the 100 Moving Average (MA) as a support level again in the four-hour time frame.
Market Overview
The mainstream adoption of Bitcoin, driven by institutional investors, has now involved nation-states, including the United States and El Salvador. Bitcoin’s long-term prospects were boosted after US President Donald Trump signed an Executive Order directing the creation of a sovereign wealth fund led by the Treasury and Commerce Departments.
Furthermore, Trump’s crypto and AI Czar David Sacks announced in a press conference the commitment of the Trump administration to promote the mainstream adoption of digital assets through clear regulatory frameworks.
With around 3 million Bitcoins available in the free market, through centralized exchanges and mining processes, the rising demand from whale investors is expected to trigger a large-scale rally similar to the 2017 cycle.
