No positive catalyst, how low can Bitcoin go

The only strong cryptocurrency in the market, Bitcoin, has also started to falter. In the early hours of the first day of February, a sharp drop pierced through $75,000, wiping out the whale insider we have long trusted.

It also reached the cost basis of Bitcoin's largest holder, Strategy. Strategy holds a total of 712,647 BTC, with a total acquisition cost of around $54.19 billion, at an average cost of approximately $76,037 per BTC. Billions of dollars in profit disappeared.

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 find reasons.

Geopolitical Conflict

First is the international conflict. On the self-proclaimed fastest news source, X, videos show explosions in several locations in Iran. Currently, the U.S. and Israel have not made any official statements, and the authenticity cannot be determined yet.

Iran is also conducting military exercises in a sensitive area, showing no fear.

The conflict between the U.S. and Iran seems to be something openly discussed but not confirmed in the market. A few days ago, the movements of the U.S. aircraft carrier and Iran's response caused a plunge in global risk assets, including gold. Increased uncertainty always causes Bitcoin, which trades 24/7, to fluctuate first.

Government Shutdown

In the early hours of the 31st local time, the U.S. government officially began a partial shutdown. It's happening so fast; 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 sent it to the House for approval. However, because House members are not in Washington and will not return until Monday (February 2), a partial government shutdown was unavoidable despite the Senate's vote.

Compared to the last record-breaking government shutdown, this one doesn't seem as severe, but it's still not a good thing. The main reason is that hundreds of billions of dollars in liquidity are now locked up, and since it's the weekend with already low liquidity, there won't be any worse outcome.

Fear for Monday

The epic plunge of gold and silver, rumors circulating that U.S. banks are starting to fail, and the market is still pricing in uncertainty. What will happen on February 2 is drawing global attention.

Where Will It Drop To

Placeholder VC partner Chris Burniske previously stated that it is crucial to focus on key support levels such as $80,000, $74,000, $70,000, $58,000, and $50,000 and below. Short-term price movements are not the main focus. If the price rebounds, hold and gradually diversify; if there is a deep pullback, consider it an opportunity to increase positions in Bitcoin and high-quality crypto assets.

Trader Merlijn The Trader previously stated that Bitcoin's key support level was around $80,000, historical data shows that around 127,000 BTC were bought in that price range in the past.