The crypto market is slightly bouncing back from early Friday’s jitters on escalating conflict between Israel and Iran.

After slumping to the $102,600 mark, bitcoin

rebounded to around $106,000 before fading lower in the U.S. afternoon hours with reports about a fresh wave of airstrikes targeting Iran. The top cryptocurrency was down 1.6% in the last 24 hours, changing hands at $105,200 and still less than 6% shy of its all-time high price.

Meanwhile, the CoinDesk 20 — an index of the top 20 cryptocurrencies by market capitalization, excluding memecoins, stablecoins and exchange coins — has lost 4.4% in the same period of time. Tokens such as ether

, avalanche and toncoin were the hardest hit, slumping between 6% and 8%.

Crypto stocks, however, aren’t doing too hot. Most equities are in the red, especially bitcoin miners MARA Holdings (MARA) and Riot Platforms (RIOT), down 5% and 4% respectively. A notable exception is stablecoin issuer Circle (CIRCL), which is still benefiting from the windfall of its recent IPO; the stock is up 13% today, with news of retail giants Amazon and Walmart reportedly exploring stablecoins adding to the momentum.

Traditional markets don’t seem overwhelmingly concerned by the war. While gold is up 1.3%, potentially gearing up for new all-time highs, the S&P 500 and Nasdaq are only down 0.4% each.

What’s next for bitcoin?

“Nice bounce thus far and lack of follow-through lower,” well-followed crypto trader Skew said in a Friday X post. Market participants will likely remain cautious through the weekend with BTC tightly correlated with traditional markets amid heightened geopolitical risks, Skew added.

On the longer timeframe, some analysts see risks of a deeper pullback.

10x Research founder Markus Thielen noted that BTC’s drop below $106,000 translates to a failed breakout, and traders should wait for more favorable setups before rushing to buy the dip.

He highlighted the $100,000-$101,000 zone as key support, warning that a break below could mark a return to the broader consolidation phase similar to last summer.

John Glover, chief investment officer at bitcoin lender Ledn, argued that bitcoin entered a corrective phase from its record highs that could see the largest digital asset drop to $88,000-$93,000.

He said the $90,000 level could offer a favorable entry for opportunistic investors before BTC resumes its uptrend.

“Once this pattern has played out, the next move higher to the $130,000 area is expected to begin,” he said.

Bitcoin’s price is still struggling to regain its upward momentum following the establishment of a new all-time high above $111,000 last week. Today, Bitcoin trades below $106,000 with a current trading price of $105,381, marking a 1.2% increase in the past day and a 5.8% decrease from its peak.

The current movement suggests a cooling-off period as traders and analysts monitor for potential market reentry points. Despite the price retreat, the mood across the market remains relatively stable, with the Crypto Fear & Greed Index still hovering in the neutral zone.

This suggests that the market is yet to enter the euphoric stage typically associated with aggressive buying sprees. While the immediate trend appears sideways, analysts are beginning to highlight certain technical and on-chain signals that may shape Bitcoin’s short-term trajectory.

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Bitcoin Short-Term Investors Watch $96.7K as Critical Support

A recent assessment by an on-chain contributor to CryptoQuant’s QuickTake platform, known as abramchart, identifies $96,700 as a crucial level of interest.

This figure aligns with the average acquisition price for short-term holders, making it a potential rebound zone if Bitcoin experiences a further dip. According to the analyst, this support may serve as a trigger point for renewed buying interest should a correction continue to unfold.

Additionally, rising Bitcoin dominance is placing pressure on alternative cryptocurrencies, including Ethereum. The analyst notes that corrections in Bitcoin often redirect capital away from altcoins, potentially weakening their short-term performance.

In this context, the broader crypto market may experience liquidity fragmentation until Bitcoin reestablishes directional clarity. Abrahchart wrote:

If liquidity is available, it is advisable to wait and observe market movements, with the possibility of entering new positions after the anticipated correction completes.

Accumulation Activity Suggests Institutional Involvement

In a separate insight shared on CryptoQuant, another analyst, Mignolet, highlights a notable relationship between movements in Bitfinex’s Bitcoin reserves and price action.

Historically, declining reserves on Bitfinex have often preceded upward trends in Bitcoin’s price, suggesting these outflows may signal increased accumulation.

On the latest occasion, around 24,000 BTC were transferred to two wallets, one of which has been officially identified by Bitfinex and Tether CEO Paolo Ardoino as belonging to 21 Capital (XXI), a Tether-backed entity.

The second wallet involved in receiving 14,000 BTC was not formally disclosed, but timing and transaction behavior suggest a similar purpose. Unlike earlier transactions often linked to cold storage adjustments, these movements appear to reflect strategic acquisitions.

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This level of accumulation, particularly by a known Tether-affiliated entity, adds another dimension to Bitcoin’s current price narrative. As institutional players position themselves, retail participants may find additional confirmation of long-term interest in the asset despite short-term fluctuations.

Featured image created with DALL-E, Chart from TradingView

The move began around 21:00 UTC on Sunday, when bitcoin spiked more than $2,500 in less than an hour — a pattern that can be attributed to thin weekend liquidity and potential algorithmic buying triggered by technical levels.

Such price action was a textbook short squeeze followed by aggressive profit-taking or stop-run. A short squeeze happens when traders betting against a price (short sellers) are forced to buy the asset as it rises, to cover their losses, which pushes the price even higher and often very quickly.

The sudden move wiped out over $460 million in long positions and $220 million in shorts, across futures tracking majors like ether (ETH), solana (SOL), and dogecoin (DOGE).

The liquidation wave was notable for occurring during traditionally quiet weekend hours, an unusual event that marks forced selling or buying activity by a major player.

SOL, DOGE and XRP prices are down more than 4% in the past 24 hours, data shows, with the broad-based CoinDesk (CD20) down more than 2%.

The volatility follows a week of macro uncertainty, with Moody’s cutting the U.S. credit rating on Friday and inflation fears resurfacing after mixed economic data. The downgrade also led to U.S. 30-year treasury yields breaching the 5% mark.

While crypto has broadly benefited from renewed institutional inflows and spot ETF momentum, traders remain cautious at current price levels, as reported.

Bitcoin is flat over the past week, but the recent failure to hold above $106,000 — a key psychological and technical level — may signal near-term resistance, FxPro’s Alex Kuptsikevich told CoinDesk last week.

Meanwhile, some traders anticipate higher volatility in the days to come in a warning sign for those looking to leverage their bets.

“Investors are shifting capital to Bitcoin as concerns grow over a pending US spending bill that could add trillions in debt and push for higher Treasury premiums,” Haiyang Ru, co-CEO of the HashKey Business Group, told CoinDesk in a Telegram message.

“But while bitcoin hovers just below new highs, we anticipate more market volatility as traders prepare for new trade deals and a final version of the fiscal policy,” Ru added.

Read more: U.S. 30-Year Treasury Yield Breaches 5% Amid Moody’s Rating Downgrade, Fiscal Concerns