Bitcoin) is a cryptocurrency (BTCMatrixport estimates that the correction will last through March or even April, before the stock market tries to return to its previous highs.
Bitcoin dropped below $80,000 for the first week on February 27 amid an escalating trade war and a wider market decline.
Three major US stock market indexes also suffered losses, with the Nasdaq 100 dropping 7.05% over the past five days, while the S&P 500 and the Dow Jones Industrial Average fell 1.33% each.
“Analyzing macroeconomic trends and central bank policies gives us a clear edge in forecasting Bitcoin’s price trajectory,” Matrixport’s research report dated 28 February contains the following:
“This type of analysis is only becoming more crucial, especially as Wall Street investors—who track these macro factors daily—are now actively participating in Bitcoin trading.”
Related: Bitcoin needs ‘to find real organic buyers’ to resume uptrend — VC
US dollar gains as traders look for refuge
In the financial turmoil of the past week, the US Dollar has seen a strong performance.
DXY measures the DXY index against six major currencies. Source: TradingView
“A stronger US dollar causes this liquidity measure to decline, which suggests downward pressure on Bitcoin prices. Global liquidity peaking in late December 2024—driven by a surging US dollar—provides a clear explanation for Bitcoin’s ongoing correction,” Matrixport reported in its report.
US Dollar Index (DXY), which measures the value of the US currency, surged a third day in a row, reaching 107.40 as traders sought to protect their investments from a sell-off on markets. Donald Trump’s reaffirmation of tariff increases, which imposed a 25% tax on Canadian and Mexican imports and an extra 10% on Chinese products, on March 4, gave the dollar a boost.
Related: Bitcoin needs ‘key’ $75k support to avoid price drop amid macro concerns
The traditional market has become more important to cryptocurrency traders. This is partly because of the popularity of Bitcoin ETFs, launched in the U.S. in January 2024, and which attracted $39 billion since then.
However, 56% of these inflows are likely tied to arbitrage strategiesMarkus Thielen, 10x Research, says that the rest of Bitcoin ETFs were purchased for long-term investment.
The Bitcoin bulls continue to lose
Bitcoin is a popular trading concept that has attracted many traders. “buy the dip,” It is the same as buying a product on sale.
Santiment’s social sentiment tracking found that there were mentions of “buying the dip” They have risen to the highest levels since July 2024.
Charles Edwards founder of Capriole Investment digital asset fund told Cointelegraph in an earlier interview Fear and liquidity may be a sign that the stock market is about to reach a temporary bottom.
CryptoQuant CEO Ki Young Ju said that the bullcycle is still not over. added He’d be mistaken if Bitcoin dropped below $75,000
Magazine: I became an Ordinals RBF sniper to get rich… but I lost most of my Bitcoin
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Source: cointelegraph.com
