Bitcoin, the only resilient cryptocurrency in the crypto space, is also beginning to falter. On the first day of February, a sharp drop occurred in the early hours, plunging to $75,000.
After nearly a year, we are once again seeing Bitcoin starting with a 7. The peak of the 2021 bull market was $69,000, which is very close.
As usual, we still need to look for reasons.
Geopolitical Conflicts
First, international conflicts. On X, known as the fastest news platform in the world, several videos show explosions in multiple locations in Iran. As of now, neither the United States nor Israel has made any statements, so it is still impossible to verify their authenticity.
Iran is also conducting military exercises in sensitive areas, demonstrating its fearlessness.
Of course, the conflict between the U.S. and Iran seems to be something already known in the market but not yet confirmed. A few days ago, the movements of the U.S. aircraft carrier and Iran's response caused a sharp drop in global risk assets, including gold. Increased uncertainty always leads to volatility in Bitcoin, which trades 24/7.
Government Shutdown
In the early hours of the 31st local time, the U.S. government officially began a partial shutdown. It happened so quickly—the last shutdown feels like it was just last year.
Previously, the U.S. Senate passed a spending bill to fund most federal government departments and submitted it to the House of Representatives for review. However, since House members were not in Washington and would not return until Monday (February 2), the Senate vote could not avoid a partial government shutdown.
Referring to the last record-breaking government shutdown, this one doesn’t seem as severe, but it’s still not good. The main reason is that hundreds of billions of dollars in liquidity are locked up, and with the weekend already having low liquidity, the situation couldn’t be worse.
Fear of Monday
The epic plunge in gold and silver, along with rumors that some U.S. banks have begun to collapse, shows that the market is still pricing in uncertainty. What will happen on February 2? The world is watching.
Where Will It Fall To
Chris Burniske, a partner at Placeholder VC, previously stated that key support levels to focus on are $80,000, $74,000, $70,000, $58,000, and $50,000 or below. Short-term fluctuations are not the core concern. If prices rebound, hold and gradually diversify allocations. If there is a deep correction, consider it an opportunity to increase holdings of Bitcoin and other high-quality crypto assets.
Trader Merlijn The Trader previously mentioned that Bitcoin’s important support level is around $80,000. Historical data shows that approximately 127,000 BTC were bought at that price range previously.
