Bitcoin Outlook: Risk Aversion Holds

Key Events

• Wall Street’s traditional players are deepening their digital-asset footprint, with firms including Morgan Stanley, Goldman Sachs, JPMorgan, and Citigroup stepping up institutional crypto efforts.
• Market risk aversion continues to limit Bitcoin’s recovery from the 80,000 level to 94,000 so far, amid escalating geopolitical frictions involving the US, Venezuela, and Greenland, alongside growing uncertainty surrounding Fed rate policy.
• In line with muted S&P 500 and Nasdaq performance near their 2025 highs, Bitcoin and Ethereum are holding price action near their 2025 lows, increasing the risk of bearish forecast extensions.

While the long-term outlook for a sustainable trend across cryptocurrencies, including Bitcoin and Ethereum—alongside AI and technology—remains constructive, short-term headwinds persist. These pressures are emerging with the entry into the second year of Trump’s second term, following a period of exhausted momentum and heightened risk aversion driven by escalating geopolitical risks. These include Maduro’s fall, increased US dominance over Venezuelan resources, and the strategic focus on Greenland, which has raised defensive postures among EU nations. Uncertainty over the fed policy, mentioned in my previous EURUSD article, is also increasing market confusion and risk aversion. This backdrop has supported defense-sector stocks, including Lockheed Martin, which has risen over 20% since December.

In the cryptocurrency space, Bitcoin and Ethereum experienced a corrective phase between October and November 2025, exceeding 30%, followed by a sluggish and consolidative recovery between December 2025 and January 2026 so far. Bitcoin is currently challenging the 94,000 level, while Ethereum is testing the 3,477 mark. Key levels remain critical in confirming whether the corrective cycle will persist in line with broader market risk aversion or whether the primary bullish trend can reassert itself.

Technical Analysis: Quantifying Uncertainties

Bitcoin Outlook: Monthly Time Frame – Log Scale

Source: Trading view

From a monthly perspective, Bitcoin’s price action is holding above a trendline connecting consecutive higher highs between 2015 and 2023, now extending to include the 80,000 low of 2025. This creates a significant inflection point, coinciding with the monthly RSI retesting its neutral zone from above.

From a bearish perspective, a breakdown below this structural support and the 80,000 level could extend another sharp retracement toward 70,000 initially, and in more severe scenarios, toward the 50,000 zone. Such levels could represent potential buy-the-dip opportunities, aligned with longer-term projections toward 200,000.

From a bullish perspective, the current support structure may sustain consolidation and allow a move back toward the 110,000 level. A clear break above this zone would be required to re-extend bullish projections toward 126,000, 130,000, 150,000, and ultimately 200,000, in line with the upper boundary of the long-term monthly formation connecting consecutive highs between December 2017 and March 2021.

Written by Razan Hilal, CMT

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