Geopolitical Tension, Falling Funding Rates, and Transition to Ether: Profit Taking and Correction Risks Increase in Bitcoin

Despite the strong macroeconomic data recently, Bitcoin is trading in an environment of declining investor confidence. Particularly, the decline in funding rates, miners' shift to Ether, and geopolitical tensions raise the risk of profit realization in the market.

Funding Rates at Seven-Week Low

Following news of an attack by Iran on U.S. military bases in Qatar on Monday, the price of Bitcoin briefly fell below $100,000. Although it rebounded to $108,000 on Wednesday, investors' cautious stance in futures trading is notable.

On Wednesday, the funding rate in BTC perpetual futures fell to its lowest level in seven weeks. In neutral markets, long positions usually make funding payments, while negative rates are rarely seen. Interestingly, this decline occurred while the price was moving upward, raising doubts about the sustainability of the upward movement among investors.

Trade Tensions and Global Uncertainty Create Pressure

The U.S.'s global trade policies are also putting pressure on the market. Particularly, the expiration of the trade agreement with the European Union on July 9 raises the risk of tariffs. According to an analysis by The Washington Post, the Trump administration has made over 50 changes to tariffs since taking office. This increases concerns among investors that trade wars may escalate.

Weak Growth Data and Stock Concerns

The U.S. economy's GDP data for Q1 2025 showed a contraction of 0.5%. CNN attributed this decline to companies increasing their inventories in anticipation of possible tariff hikes, resulting in a growing trade deficit. Nevertheless, Bitcoin's staying below $112,000 reflected investors' risk asset perception.

Despite the Russell 2000 index reaching a four-month high, the limited movement of BTC is suppressed by concerns over inflated valuations driven by artificial intelligence. According to Gartner analysts, many AI projects are still at the 'early-stage trials' level and often based on exaggerated expectations.

This table indicates that profit realizations above $105,000 in Bitcoin may increase.

Bit Digital's Ether Move and Mining Concerns

Another important development affecting the Bitcoin price is the strategic changes of miners. The U.S.-based mining company Bit Digital (BTBT), listed on Nasdaq, announced on Wednesday that it will reduce its BTC reserves and focus on accumulating Ether (ETH).

As of March 31, the company has 24,434 ETH and 417.6 BTC in its portfolio. This move has raised market concerns that other miners may similarly liquidate their BTC assets. Particularly, the decline in mining revenues to the lowest levels in the past two months stands out as a potential factor that could increase selling pressure.

Macro Support Continues, But Correction Risk Remains Alive

Overall, global economic uncertainties and the expectation that central banks will turn to expansionary policies may support Bitcoin in the long run. However, in the current scenario, a potential correction below the $100,000 level cannot be completely ignored.


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