Bitcoin Buyers Stay Away Despite $65K Price

Crypto analyst BitQuant says investors won’t touch Bitcoin at $65,000. The reason? Everyone’s scared of a potential U.S. attack on Iran that could send Bitcoin crashing to $50,000.

Only MicroStrategy’s Michael Saylor keeps buying the dip, according to BitQuant’s recent analysis. Most traders are sitting on their hands, worried that geopolitical tensions could trigger a massive selloff. Ethereum faces the same problem – nobody wants to catch a falling knife when war drums are beating. BitQuant pointed out how Bitcoin already dropped from $90,000 to $60,000 without any major news catalyst, so further declines seem pretty likely regardless of Middle East tensions.

Market sentiment is brutal right now.

BitQuant thinks current prices don’t really matter for Bitcoin and Ethereum’s long-term trajectory. He’s still bullish on both cryptocurrencies but admits the short-term outlook is murky. “People treat Bitcoin like a football match – when there’s no action, interest dies,” he said in his latest post. The analyst criticized investors for having goldfish memories, forgetting how volatile crypto can be even during supposedly calm periods.

CryptoQuant’s data paints an even darker picture. Their research suggests Bitcoin could fall below $40,000, getting close to the long-term holders’ cost basis of $38,900. Bear markets historically push Bitcoin below this threshold, triggering what analysts call a “final capitulation phase” with losses around 20%. After that bloodbath, markets usually rebuild and set up for the next bull run.

But we’re not there yet.

The Coinbase Premium Index shows barely any signs of recovery, according to another CryptoQuant study. The 30-minute moving average briefly popped above zero but couldn’t hold the gains. That lack of sustained buying pressure from U.S. investors is probably contributing to the ongoing price weakness across major cryptocurrencies.

Macroeconomic factors are making things worse. The Federal Reserve’s February 20 meeting minutes hinted at potential interest rate hikes, adding another layer of uncertainty. Higher rates typically hurt risk assets like Bitcoin and Ethereum, so investors are understandably cautious about deploying capital in this environment. BlackRock reportedly paused its crypto investments, citing volatile market conditions that make it hard to justify increased exposure.

Trading volumes tell the same story. Binance saw a significant drop in Bitcoin and Ethereum trades over the past week, suggesting even active traders are stepping back. When the world’s largest crypto exchange sees volume dry up, it’s a clear sign that market participants are waiting for clearer signals before making their next move. More on this topic: BitMine Drops Million on Ethereum.

JPMorgan released a report on February 24 that tried to find some silver lining. The investment bank said current price levels might attract long-term investors looking to capitalize on an eventual recovery. But even JPMorgan warned against short-term speculation, calling the current market environment “unpredictable” and “challenging for most investment strategies.”

The derivatives market reflects this caution too. Chicago Mercantile Exchange data from February 22 showed declining open interest in Bitcoin futures contracts. Traders are reducing their exposure to potential price swings, preferring to sit on the sidelines rather than bet on which direction the market will move next.

Network activity is declining as well. Glassnode reported on February 23 that active Bitcoin addresses dropped over the past month. Fewer people are actually using Bitcoin, which could signal broader reluctance among retail and institutional participants to engage during this volatile period.

Grayscale Investments announced on February 24 that it won’t add new cryptocurrencies to its portfolio in the short term. The firm manages one of the largest crypto funds but wants to assess macroeconomic pressures before making any major moves. That’s pretty telling when even dedicated crypto investment firms are pumping the brakes.

Saylor remains defiant though. The MicroStrategy CEO reiterated on February 21 that his company will keep holding Bitcoin as a strategic asset. He still believes in Bitcoin’s long-term potential despite the current downturn, calling it a “critical component” of MicroStrategy’s corporate strategy.

Smaller cryptocurrencies are getting hammered even worse. Solana dropped to $20 on February 23, hitting its lowest level in months as traders fled to cash. Some investors think Solana’s technology could drive future recovery, but they’re not willing to bet on it right now. Related coverage: Bitcoin Developer Pushes Discord to Ditch.

The NFT market is crashing alongside everything else. OpenSea reported declining transaction volumes over the past two weeks, showing that appetite for digital collectibles is disappearing fast. When people are worried about paying rent, they’re not buying cartoon apes.

DeFi is bleeding too. Total value locked across various platforms fell below $100 billion on February 24, according to DeFi Pulse. That’s the first time TVL dropped that low since last year, reflecting cautious sentiment among DeFi participants who are pulling their money out of yield farming protocols.

The SEC is making things worse by scrutinizing crypto exchanges. On February 22, reports emerged that regulators are examining compliance practices related to anti-money laundering and customer protection. More regulatory pressure is the last thing the crypto market needs right now.

Bitcoin closed Friday at $64,800, down 3.2% for the week.

Iran’s military capabilities have expanded significantly since 2020, with advanced missile systems that could disrupt global energy markets if conflict erupts. Oil prices typically spike during Middle East tensions, historically correlating with Bitcoin selloffs as investors flee to traditional safe havens like gold and U.S. Treasury bonds.

Several major crypto hedge funds have reduced their positions by 40-60% over the past month, according to industry sources. Three Arrows Capital’s former executives warned that institutional money remains “extremely risk-averse” given the current geopolitical climate and potential for cascading liquidations across leveraged trading positions.