According to Matrixport’s analysis, current Bitcoin corrections may continue until March or April before attempting to gather towards previous highs.
Bitcoin (BTC) for the first time fell below $80,000 on February 27 amid a wider market sale driven by growing global trade tensions.
Three major US stock market indexes also suffered losses, with the Nasdaq 100 down 7.05% over the past five days, while the S&P 500 and Dow Jones Industrial Average each down 1.33%.
“Analyzing macroeconomic trends and central bank policies makes it clear that we can predict Bitcoin’s price trajectory,” Matrixport wrote in a February 28th research report.
“This type of analysis is becoming more important, especially as Wall Street investors who track these macro factors every day are now actively involved in Bitcoin trading.”
Related: Bitcoin needs to resume uptrends to “find real organic buyers” – VC
The US dollar will strengthen as traders seek evacuation
The winner of this week’s financial turmoil is the US dollar, which is bolstered.
The DXY dollar index was measured against a basket of six major currencies. Source: TradingView
“The stronger US dollar lowers this liquidity measure and suggests downward pressure on Bitcoin’s price. Global liquidity in late December 2024 is driven by a surge in the US dollar, but provides a clear explanation of Bitcoin’s ongoing revision,” Matrixport said in the report.
The US Dollar Index (DXY) has skyrocketed for the third day in a row, approaching 107.40 as traders evacuated to greenback amid the sale of the market. The boost comes after US President Donald Trump reaffirmed the tariff hike, imposing a 25% tariff on imports from Canada and Mexico, and an additional 10% on Chinese products that came into effect on March 4th.
Related: Bitcoin needs “Key” $75K support to avoid price drop amid macro concerns
With the success of Bitcoin ETFs in the US, which has seen a $39 billion inflow since its launch in January 2024, traditional market movements are becoming increasingly important for cryptocurrency traders.
However, 56% of these influxes could be linked to arbitration strategies, but according to Markus Thielen of 10X Research, the remaining Bitcoin ETF purchases are due to long-term investments.
The Bitcoin Bulls are still losing
Some Bitcoin traders thrive with the concept of “buying a DIP.” This refers to accumulating Bitcoin when the price is correct.
Santiment’s Social Sentiment Tracker has found that the “buy DIP” mention has skyrocketed to the highest level since July 2024.
Charles Edwards, founder of Capriole Investment’s Digital Asset Fund, told Cointelegraph in a previous interview that important fear levels and liquidation could indicate that the market is near the short-term bottom.
Meanwhile, encrypted CEO Ki Young Ju said the bull cycle wasn’t over, but added that if Bitcoin fell below $75,000, he could be wrong.
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