Bitcoin is currently trading below the critical $70,000 mark. A new report from the research firm Ecoinometrics suggests the market may not be forming a base for a rebound. Instead, the cryptocurrency could be vulnerable to another decline, driven by three overlapping factors: weakening stock market momentum, structural changes in Bitcoin’s volatility, and a Federal Reserve that is steady but not supportive.
According to the report, Bitcoin no longer trades in isolation. Its price is now increasingly tied to equity markets, capital flows, and broader economic conditions—a linkage that is currently working against it. Bitcoin is showing weakness, stock markets are losing momentum, and the Fed’s neutral stance offers little extra liquidity support. Together, these factors keep downside risks high.
While Bitcoin has tried to stabilize in recent weeks, Ecoinometrics warns this does not look like a clear bottom. It appears more like a pause within an ongoing downtrend. Structural challenges are already present, including continued outflows from Bitcoin ETFs and a broader “risk-off” mood in financial markets.
The report notes Bitcoin is trading below its long-term trend, with its declining 200-day moving average (currently above $100,000) acting as resistance—a classic bearish sign. In contrast, the Nasdaq 100 has stalled for about three months, but its 200-day average is still rising, suggesting stocks are slowing but not yet in a confirmed downturn. This distinction matters because when Bitcoin weakens on its own, declines can be gradual. However, history shows that when stocks turn decisively lower, Bitcoin tends to fall sharply alongside them.
Beyond price, the firm points to a deeper shift: a significant drop in Bitcoin’s volatility. In past cycles, 12-month volatility spiked dramatically during both bull markets and crashes. This time, even after a full cycle since 2022, volatility has not returned to those extreme levels. Peak volatility in the current cycle has been notably lower.
This change reflects a shift in who is driving demand. ETF flows now play a dominant role. These flows are typically larger, steadier, and more systematic than the retail-driven surges of earlier cycles. Bitcoin has become embedded in institutional portfolios, often alongside tech and growth stocks. This brings advantages like lower volatility and more predictable flows, potentially strengthening Bitcoin’s long-term durability.
However, there is a trade-off: greater sensitivity to stock market declines. As Bitcoin becomes more integrated into the broader risk-on market, it behaves more like a component of that system than a detached speculative asset.
On the policy front, Ecoinometrics suggests the Fed’s stance remains largely unchanged: inflation has improved but isn’t fully contained, and the job market is still strong. As a result, rate cuts are not urgent, and rate hikes are not imminent. Current policy is in a middle ground—well below the tightening peak of 2022 but far above the extreme dovishness of 2020. For Bitcoin, this steady stance removes the risk of a sudden policy shock but does not provide a tailwind. In a fragile market, stability may be preferable to turbulence.It is frightening, yet it offers little protection if risky assets start to decline. Featured image from OpenArt, chart from TradingView.com
Frequently Asked Questions
Of course Here is a list of FAQs about the potential risks to Bitcoins price framed around a research firm highlighting three major risks
Beginner General Questions
1 Why are people saying Bitcoin might crash again
A research firm recently pointed out three big ongoing risks that could push the price down potential new regulations from governments pressure from selling by large holders and overall uncertainty in the global economy
2 What are the three major risks mentioned
The three highlighted risks are Regulatory Crackdowns Persistent Selling Pressure and Macroeconomic Uncertainty
3 Isnt Bitcoin supposed to be independent of governments and banks
While its design is decentralized its price and adoption are still heavily influenced by realworld factors Government regulations can affect how easily people can buy or use it and largescale economic conditions impact how much money investors are willing to put into risky assets like Bitcoin
4 As a beginner should I be scared away from investing
Not necessarily scared away but you should be cautious This highlights that Bitcoin is a highrisk volatile asset You should only invest money you can afford to lose do your own research and consider a longterm strategy rather than trying to time the market
5 What does selling pressure mean
It means there is a consistent or large amount of Bitcoin being sold on exchanges When more people are selling than buying the price tends to fall This can happen when large holders or entities like the bankrupt Mt Gox exchange distribute coins to creditors who may sell them
Intermediate Advanced Questions
6 What kind of regulatory crackdown is most likely
The biggest concerns are stricter rules on cryptocurrency exchanges clearer tax enforcement and potential restrictions on how Bitcoin can be used in decentralized finance applications A ban is considered unlikely in most major economies but harsh regulations can dampen enthusiasm
7 What is the Mt Gox overhang and why does it matter
Mt Gox was a major exchange that collapsed in 2014 It is finally