Bitcoin and broader crypto market going through tough times

[Ben Graham]

According to the latest data, Bitcoin is not in a good position for growth. Over the past 10 days the supply of stablecoins has shrunk by roughly $2.24 billion, coinciding with Bitcoin's fall from about $95,000 to $88,000.

This trend points to general nervousness in the crypto market. Stablecoins—normally treated as a safe harbor amid crypto volatility—are losing their appeal in this case. The drop in stablecoin supply suggests traders prefer to move funds into more traditional assets, such as the US dollar, rather than rotate into cryptocurrencies.

The lack of optimism is also reflected in stagnant open interest in Bitcoin derivatives. The absence of meaningful growth in this area indicates traders are not rushing to add risky positions while awaiting clearer direction. This cautious stance contrasts with boom periods when derivatives are actively used for speculation and hedging.

Notably, capital is flowing into gold—the traditional safe?haven asset. This supports the view that investors facing crypto uncertainty are seeking more reliable, time?tested instruments to preserve capital. Gold is currently showing impressive gains, so it's unsurprising that speculative money is migrating there.

Overall, the current crypto market environment reflects prevailing caution and risk aversion. The shrinking stablecoin supply, stagnant open interest in Bitcoin derivatives and flows into gold suggest investors are taking a conservative approach while waiting for better market conditions. Further developments will depend on many factors, including the macroeconomic backdrop, regulatory changes and overall market sentiment.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $90,000, which would open a direct path to $92,100 and then $94,000. The farther target is around $95,800; a break above that would signal attempts to resume the bull market. On the downside, buyers are expected at $87,900. A move back below that area could quickly push BTC toward $86,300. The far downside target is $83,200.

Ethereum

A clear hold above $2,970 would open a direct path to $3,050. The farther target is around $3,129; surpassing that would indicate strengthening bullish sentiment and renewed buyer interest. On the downside, buyers are expected at $2,887. A move back below that area could quickly push ETH toward $2,789. The far downside target is $2,684.

Chart indicators

• Red indicators represent support and resistance levels, where a slowdown or active price increase is expected.
• Green represents the 50-day moving average.
• Blue indicates the 100-day moving average.
• Light green signifies the 200-day moving average.

Crossovers or tests of the moving averages usually halt or set the market's momentum.

The material has been provided by InstaForex Company - www.instaforex.com