Bitcoin Traders Are Watching These Levels for Cues on Downside Risk

Crypto markets are giving no return opportunities for intraday traders, but long-term market watchers say the market is in a coiled spot and key levels are to be monitored for moves on either side.

Bitcoin BTC hovered just above $105,000 on Wednesday, showing a steady rise from earlier in the week. Ether ETH, Cardano’s ADA ADA, dogecoin DOGE and XRP XRP showed returns under 1%. Overall market capitalization declined 1.8%.

Nick Ruck, director at LVRG Research, said the market’s shift in sentiment reflected a sense that trade tensions, and that the drag on risk assets may have been priced in.

“While the U.S. economy shows signs of contraction, investors are optimistic on tech, especially on the future outlook of Bitcoin as institutions continue to integrate further with the industry,” Ruck said, adding that despite inflation risks and uncertain macro policies, the crypto market’s long-term trajectory remains positive.

Bitcoin’s price action over the past week has been telling. According to data from Fineqia research analyst Matteo Greco, BTC ended last week week around $105,700, down 3.1% from the previous week’s close near $109,050. This came as BTC spot ETFs saw $150 million in net outflows in the the first negative print after six consecutive weeks of inflows.

“BTC reserves on exchanges continue to decline, while reserves for major altcoins such as ETH and XRP have stabilised,” Greco wrote in an email to CoinDesk.

Stablecoin reserves on exchanges have reached their highest levels in years, he added, a sign that investors may be preparing to deploy fresh capital rather than exiting the market.

Greco added that bitcoin’s market-value-to-realised-value (MVRV) ratio currently stands at around 2.2, below the historical top threshold of 3.7. That suggests we’re in the late stages of the cycle — but not at the peak yet.

Bitunix analysts pointed to the Fed’s dovish comments as a short-term boost to risk appetite, though they warned that dollar volatility could disrupt flows.

“Bitcoin’s short-term key level is at $105,000,” they said. “If it can hold above this level, it may continue to rise. Conversely, if the market shifts back to risk aversion, the key support level at $102,700 must be defended.”

As such, analysts say that if Bitcoin’s dominance begins to fade, historically a sign of late-cycle rotation, altcoins could gain momentum, marking the later innings of a bull market.

With stablecoin reserves rising and institutions continuing to integrate Bitcoin into their strategies, traders are bracing for what could be a volatile but potentially lucrative summer.

We’re hoping that the positive trend for the crypto markets continues for the long run,” LVRG’s Ruck said.