Bitcoin Rally Stalls... Policy Uncertainty and Tech Risks Hold Back Momentum

Investor Sentiment Cools Amid Policy Uncertainty
Medium- to Long-Term Concerns Resurface Over Quantum Computing Risks

Bitcoin, which had been experiencing a sharp rebound recently, has paused for breath around the $95,000 level. Analysts say that the upward momentum in the market has weakened, citing the delay in the U.S. Senate's discussion of the Digital Asset Market Structure Bill and growing concerns that advances in quantum computing technology could pose a threat to cryptocurrency security.

Bitcoin, which had been experiencing a sharp rebound recently, has paused around the $95,000 level.

According to CoinMarketCap, a virtual asset market data site, as of 8:40 a.m. on January 17, Bitcoin was trading at $95,470, down 0.01% from the previous day. Ethereum, the second-largest cryptocurrency by market capitalization, fell 0.49% to $3,294, while major altcoins such as XRP also showed overall weakness. Stablecoins pegged to the U.S. dollar maintained the $1 level.

Indicators reflecting investor sentiment also showed a wait-and-see approach. The Fear & Greed Index compiled by digital asset data provider Alternative dropped to 49, moving from the 'greed' stage to the 'neutral' range compared to the previous day. CoinMarketCap's Fear & Greed Index also remained at a neutral level, and the Altcoin Season Index stayed low at 27.

Adjustments across global financial markets also weighed on the virtual asset market. On January 16 (local time), the Dow Jones Industrial Average, S&P 500 Index, and Nasdaq Composite all declined on the New York Stock Exchange. This was attributed to a dampening of investor sentiment after U.S. President Donald Trump made remarks that lowered expectations for an early interest rate cut in connection with the selection of the next Federal Reserve chair.

Bitcoin had climbed to the $97,000 range earlier in the week, reaching a two-month high, but the upward trend slowed in the latter part of the week. In particular, the market underwent a correction after the U.S. Senate postponed discussions on digital asset-related legislation. The largest U.S. virtual asset exchange, Coinbase, also withdrew its support for the bill due to issues with certain provisions, further cooling investor sentiment.

In the medium to long term, quantum computing risks are resurfacing. According to Bloomberg, investment bank Jefferies removed Bitcoin from its model portfolio, citing concerns that quantum computing could weaken cryptographic technology. Experts believe that while the potential for short-term price shocks is limited, uncertainty could increase from a long-term investment perspective.

On-chain analytics firm CryptoQuant also assessed that the recent rebound is difficult to view as a full-fledged recovery. CryptoQuant analyzed that since the current price remains below the long-term moving average, this rally is likely a temporary rebound within a bear market. Demand indicators have also failed to show clear signs of recovery, leading to expectations that market volatility will continue for the time being.