Bitcoin’s brief rally above the $74,000 mark lost momentum on Thursday as renewed geopolitical concerns and profit-taking dampened investor enthusiasm across the cryptocurrency market.
The world’s largest cryptocurrency had surged earlier in the week, reaching a high of $74,500 and breaking through a key resistance level at $71,000, a level that previously acted as a major swing high on February 8 and 15. However, the gains proved short-lived as market sentiment shifted.
By Thursday, Bitcoin had retreated to around $70,000, erasing a portion of its recent gains. Ethereum also followed a similar trajectory, declining to about $2,085. Other major cryptocurrencies, including XRP, Dogecoin, Hyperliquid, and Zcash, fell by more than 2.5% over the past 24 hours as the broader crypto market cooled.
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The earlier rally in the cryptocurrency market was largely fueled by reports suggesting that Iran had reached out to the United States to initiate talks aimed at ending the ongoing conflict. The prospect of diplomatic negotiations briefly boosted global risk appetite, encouraging investors to reenter risk assets such as cryptocurrencies.
However, the optimism quickly faded after Iranian officials denied the reports, significantly lowering expectations of a ceasefire. Data from prediction platform Polymarket shows that the odds of a ceasefire occurring in March or April have declined sharply over the past two days.
Further adding to market uncertainty, a report from Politico indicated that the administration of U.S. President Donald Trump is considering a prolonged conflict that could extend until September. Other reports suggest that U.S. intelligence agencies, including the Central Intelligence Agency, are evaluating strategies that could involve supporting Kurdish forces to destabilize Iran, raising fears of a broader regional escalation.
Market analysts say these developments have contributed to renewed caution among investors. According to Joel Kruger of LMAX Group, Bitcoin’s decline reflects a combination of profit-taking after the recent rebound and broader investor caution amid geopolitical tensions in the Middle East.
Similarly, Nick Ruck of LVRG Research told Cointelegraph that the recent rally in cryptocurrencies was driven by renewed risk appetite and inflows into exchange-traded funds (ETFs). However, he noted that the upward momentum quickly encountered resistance as macroeconomic uncertainties resurfaced.
Ruck added that while the rally provided a temporary boost under favorable liquidity conditions, broader bear-market dynamics continue to keep investors cautious. Softer macroeconomic signals, including expectations of a slowdown in U.S. February nonfarm payrolls, could leave digital assets vulnerable to renewed downside pressure.
Analysts also describe Bitcoin’s recent pullback as a “natural pause” following its breakout above $70,000. The move was partly driven by investors closing earlier bearish positions and momentum-driven buying during the rally.
Despite the short-term decline, several fundamental indicators remain supportive for Bitcoin. Institutional demand continues to grow, with corporate treasuries steadily accumulating the cryptocurrency. Notably, Strategy holds more than 568,000 BTC, while a growing number of public companies are also adding Bitcoin to their balance sheets.
On-chain data also indicates that long-term holders are increasingly reluctant to sell. Metrics show that coins held for more than one year now account for a growing share of Bitcoin’s circulating supply, a trend often viewed as a sign of strong investor conviction.
Technical Outlook
From a technical perspective, Bitcoin’s ability to hold above the $70,000 level remains crucial for maintaining bullish momentum.
If the cryptocurrency fails to reclaim and sustain a move above the $72,000 resistance zone, analysts warn that another decline could follow. Immediate support is located near $70,000, which also aligns with the 50% Fibonacci retracement level of the upward move from the $66,164 swing low to the $74,062 high.
The next key support level lies around $69,000, followed by stronger support near the $68,500 region. Should selling pressure intensify, Bitcoin could fall toward the $68,000 level in the near term.
Outlook
Analysts note that as long as institutional demand remains steady and Bitcoin continues to trade above critical support levels, the broader long-term outlook for the cryptocurrency remains cautiously optimistic despite near-term volatility.