$92K: A Critical Support Level for Bitcoin
Following U.S. President Donald Trump’s announcement of a 25% tariff on imported steel and aluminum, the cryptocurrency market experienced a minor decline on Tuesday.
According to Bitpush data, Bitcoin (BTC) dipped 1.63% in the past 24 hours, hovering below $96,000, while Ethereum (ETH) fell 2.12% to around $2,600. XRP and Solana (SOL) remained relatively stable.
The total cryptocurrency market capitalization decreased by 0.98% to $3.15 trillion over the last 24 hours. CoinGlass data reveals that $233 million in crypto positions were liquidated during the same period, with long positions accounting for the majority at $149 million.
Tariffs and Macroeconomic Uncertainty
Tracy Jin, Vice President at cryptocurrency exchange MEXC, attributed the market’s movements primarily to the Federal Reserve’s recent decision to hold interest rates steady, along with broader macroeconomic concerns. In times of uncertainty, investors tend to seek safer assets like gold or the U.S. dollar, often accompanied by a decline in interest in riskier assets, including cryptocurrencies.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, noted in a report that historically, trade war fears sparked by tariff threats tend to be short-lived. However, he explained, “This time around, savvy investors aren’t so sure; currency, bond and commodity traders are hedging their bets, with the dollar, U.S. Treasury yields and gold prices all rising as tensions escalate.”
Joel Kruger, a currency strategist at LMAX Group, believes that this is more of a market readjustment to familiar strategies rather than any substantial risk associated with extreme tariff measures.
“While the new announcement may bring short-term volatility,” Kruger stated, “we don’t see this risk triggering any major upheaval, and we anticipate that crypto assets will continue to be well-supported by medium to long-term participants looking to buy the dip.”
$92,000 Support Level Becomes Critical
Data from Checkonchain shows that the short-term holder (STH) Market Value to Realized Value (MVRV) ratio has dropped to 1.05.
The MVRV score is a key metric used to assess the profitability of Bitcoin holders. A score above 1 indicates that investors are still in profit, while a score below 1 suggests they are at a loss. The current drop to 1.05 implies that short-term holders’ profit margins are narrowing. If the MVRV score continues to decline, it could exert greater pressure on Bitcoin’s price, as it would mean that more short-term holders are nearing their break-even point.
While the MVRV remains above 1, suggesting that selling pressure from short-term holders may not be significant yet, the critical level to watch is the cost basis of short-term holders, which sits around the $92,000 mark. This level represents crucial support for Bitcoin’s price, reflecting the average price at which short-term investors bought their BTC.
If Bitcoin’s price drops towards this $92,000 level, it could trigger more selling, as short-term holders may look to minimize potential losses. A breach of this support level could signal a shift in market sentiment, with increased selling pressure driving the price even lower.
