Crypto Faces Multilayered Pressure: Strong Dollar and Geopolitical Tensions Dominate Market Trends

The cryptocurrency market continued to be volatile last week, with Bitcoin and various altcoins experiencing significant corrections despite ultimately showing signs of recovery. The pressure on digital assets stems from various external factors, ranging from dollar strength to international geopolitics. To understand why crypto is experiencing this volatility, we need to delve deeper into the complex market conditions.

Price Correction Amid Aggressive Dollar Strength

Bitcoin, which reached $74,000 mid-last week, was unable to sustain that momentum. The world’s largest asset’s price corrected to the $68,000 zone, experiencing a roughly 3.4% decline within a 24-hour period. Recent data shows Bitcoin is now at $70.93K, up 4.58% in the last 24 hours, reflecting ongoing recovery.

The pattern of selling before the weekend has become a recurring characteristic in recent months. This phenomenon creates a relatively tight trading range, with retail investors tending to close positions before the week ends.

The main cause of pressure on crypto is the soaring dollar, which recorded its largest weekly increase in a year. The US dollar strengthened as market revisions adjusted expectations for Federal Reserve interest rates. Analysts from Aurelion explain that investors shift to the safety of the dollar when geopolitical tensions rise, especially related to the Middle East situation affecting global energy prices.

Altcoins Also Feel Similar Pressure

Besides Bitcoin, other digital assets experienced similar patterns. Ether fell to $1,974 at its worst, but now recovers to $2,160 with a 5.73% increase in 24 hours. Solana corrected to $84.31 and is now at $91.84, up 6.91%. Dogecoin dropped to $0.09 but now stands at $0.10, up 5.81%. BNB declined to $627 and is currently at $640.30 (+2.39%), while XRP corrected to $1.37 and now is at $1.44, growing 4.28%.

However, from a weekly perspective, the picture is more nuanced. Bitcoin still shows a 3.6% increase over the seven-day trading period, Ether up 2.6%, and BNB gaining 2.1%. The midweek surge triggered by President Trump’s announcement of a five-day delay in Iran energy infrastructure attacks successfully eased market concerns.

On-Chain Data Reveals Ongoing Selling Pressure

Why is Bitcoin struggling to keep climbing? Deep analysis of on-chain data provides important answers. According to Glassnode, 43% of the total Bitcoin supply is currently in a loss (underwater). This situation creates ongoing selling pressure whenever prices recover.

The mechanism is simple but effective: when prices rise, holders waiting to break even will sell, creating psychological barriers to higher prices. This explains why the rally toward $74,000 cannot sustain—each rally faces offers from investors who have waited months to exit their losing positions.

However, there is a positive signal from capital flows. Messari reports a spectacular surge in net stablecoin inflows, increasing by 415%, reaching $1.7 billion in a week. Daily stablecoin transfers also increased by nearly 10%. This data indicates that fresh capital remains within the ecosystem, possibly just waiting for better opportunities to re-enter.

Geopolitical Factors Continue to Influence Market Sentiment

The US-Iran conflict remains a macro backdrop shaping trading patterns. The Strait of Hormuz, a strategic point in global oil trade, still faces potential disruptions, keeping energy prices high. This situation creates a dilemma for policymakers—rising energy costs could prolong inflation, which in turn compels the Federal Reserve to maintain high interest rates.

This combination creates the worst environment for risk assets like crypto. A strong dollar, persistent inflation, and delayed rate cuts form a triple pressure that is hard to break.

Crypto Outlook: Depends on Geopolitical and Energy Stabilization

Looking ahead, the crypto journey will heavily depend on two key variables. First, whether oil prices and shipping through the Strait of Hormuz can stabilize. If conditions improve, the crypto market could test the $74,000 to $76,000 range again, opening opportunities for further momentum.

Conversely, if geopolitical tensions worsen, prices could be dragged back to the mid-$60,000 range, where psychological resistance from holders below breakeven could pose another barrier. These decisions will be influenced by factors beyond the crypto market itself.

Currently, on-chain data shows that retail investors are not entirely absent despite prevailing concerns. The influx of stablecoins indicates that capital remains ready, and the question is whether it will be used for new entries or held back for more favorable levels. The crypto market remains in a dynamic tug-of-war between fundamental pressures and hopes for recovery.