Bitcoin traded below $76,000 on Wednesday, after reaching levels not seen since early November 2024 the day before.
Derivatives traders remain in a defensive position, with the premium on Bitcoin futures stabilizing around 6.3%, indicating a hesitation to take risks.
Renowned trader Michael Burry warned that the ongoing decline in Bitcoin could destroy significant value, especially for companies holding large reserves of Bitcoin.
The price of bitcoin ($BTC ) is recovering slightly, trading below $76,000 at the time of this report on Wednesday, after reaching levels not seen since early November 2024 the day before. Broader crypto market sentiment remains fragile, with derivatives traders remaining in a defensive position, indicating a non-interventionist approach in a challenging environment of relative weakness. Traders should be cautious, despite the short-term recovery, as long-term bitcoin trends remain bearish, with bears targeting the $70,000 level.
Tensions between the U.S. and Iran escalate following the downing of an Iranian drone
Bitcoin price remains under pressure so far this week, as the "king of crypto" fell below $73,000 on Tuesday for the first time since November 2024. The drop in bitcoin price came after news late Tuesday that the U.S. military shot down an Iranian drone that approached "aggressively" near the USS Abraham Lincoln aircraft carrier in the Arabian Sea.
"The incident occurred at a time when tensions are escalating in the Middle East, as President Donald Trump considers the possibility of carrying out military strikes against the Islamic Republic," CNBC reported.
These developments have dampened investors' appetite for risk, although President Trump's special envoy, Steve Witkoff, is scheduled to meet with Iranian officials later this week.
Following Tuesday's incident, Iran insisted that talks take place in Oman instead of Turkey and that their scope be limited to bilateral discussions on the nuclear issue only, complicating an already sensitive diplomatic effort.
Market participants are closely monitoring developments in U.S.-Iran negotiations, as any signs of escalating geopolitical tensions could lead to deeper corrections towards riskier assets like bitcoin.
Derivatives traders are still in a defensive position
K33 Research reported on Tuesday that bitcoin traders on the Chicago Mercantile Exchange (CME) have remained in a defensive position for several months.
The chart (left) below shows that the annual premium on bitcoin futures contracts remained stable at 6.3% on Tuesday, in line with the premiums observed over the past three months, indicating that traders are still largely in a non-interventionist position in a relatively weak environment. Additionally, while futures premiums were stable, the term structure continues to trend downward, with the average 7-day premium for next month in CME (right chart) currently at levels not seen since the U.S. banking crisis in March 2023, indicating significant hesitation in adding calendar risk.
Bitcoin and Ethereum futures contracts on CME: One-month rolling annual premium (left chart). Bitcoin futures contracts on CME: Average daily premium for the next month (right chart). Source: K33 Research
Noted Fitly Lund, head of research at K33 Research, stating, "Bitcoin is currently trading in a critical area, near its all-time high in March 2024 and support area in April 2025. If prices fall below this range, we are prepared to reduce risk, as we then expect a quickening of bearish momentum."
Lund added that Monday provided some promising signals for a bottom formation. Trading volumes moved to 90%, and the futures system showed an extremely rare signal linked to previous market lows, with leverage being destroyed as returns turned deeply negative.
"However, both measures provide limited reliability in isolation and may represent false flags. However, with both emerging while bitcoin remains above support, a bottom may have formed," Lund concluded.
Michael Burry warns that ongoing bitcoin sell-offs could harm companies holding bitcoin
Renowned Wall Street trader Michael Burry, who bet on the collapse of the housing market in 2008, warned that the ongoing decline in bitcoin price could destroy significant value, especially for companies holding large bitcoin reserves.
Burry said: "Bitcoin has failed as a safe haven like gold and may push aggressive corporate holders into bankruptcy, leading to wider market repercussions," Walter Bloomberg reported in a post on X on Wednesday.
As the largest corporate bitcoin holder, with 713,502 bitcoins in its reserves, the stock price of the strategy (MSTR) continued to correct, reaching a daily low of $126.74 on Tuesday, down over 70% from its 2025 high of $457.22.
As earnings and revenue reports approach on Thursday, investors remain on high alert, closely monitoring any comments about its bitcoin strategy and balance sheet exposure amid ongoing market volatility.
Weekly MSTR chart
At the same time, the current premium measure on net assets, which measures how much the market values the company relative to the net value of its bitcoin reserves and other assets, excluding liabilities, indicates -18.50% (0.81x), meaning the market values MSTR at 81% of the value of its bitcoin reserves per share (excluding the value of other businesses).
This indicates that investors are currently unwilling to pay a premium for exposure to a bitcoin strategy, as concerns about dilution, rising debt costs, and the recent drop in bitcoin price affect sentiment - making it difficult for MSTR to raise low-cost capital for further bitcoin accumulation without pressuring shareholders.
Bitcoin price forecast: Bitcoin reaches its lowest level since November 2024
$BTC recovered slightly to trade near $76,000 at the time of this report on Wednesday after hitting a low of $72,945, a level not seen since early November 2024, the day before.
The current state of the market indicates a scenario where the knife has dropped. Traders should be cautious, as attempting to buy the dip remains risky, as the downward trend may not yet be complete.
If bitcoin resumes its downward trend and closes below the daily support level at $73,072 on a daily basis, the decline could extend toward the major psychological level at $70,000.
The Relative Strength Index (RSI) reads 26 on the daily chart, indicating a strong oversold condition, suggesting strong bearish momentum. Additionally, the Moving Average Convergence Divergence (MACD) showed a bearish crossover on January 20, which is still in effect as red histogram bars rise below the neutral level, further supporting the negative outlook.
Daily BTC/USDT chart
At the same time, market participants should monitor as the main trend for bitcoin remains bearish, so any short-term recovery has a high likelihood of being a dead cat bounce - a short price increase within a broader downward trend.
If bitcoin recovers, the rally may extend towards the 61.8% Fibonacci retracement level (from the August 2024 low of $49,000 to the all-time high in October 2025 of $126,199) at $78,490.
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