The ongoing Bitcoin BTCUSD correction might continue through March or April before making a bid for previous highs, according to an analysis by Matrixport.
On February 27, Bitcoin dipped below $80,000 for the first time in a week, affected by a broader market sell-off prompted by rising global trade tensions.
The three main US stock market indexes also experienced declines, with the Nasdaq 100 suffering a 7.05% drop over the last five days, while the S&P 500 and the Dow Jones Industrial Average both fell by 1.33%.
“By analyzing macroeconomic trends and the policies of central banks, we gain a distinct advantage in predicting Bitcoin’s price movements,” stated Matrixport in their research report on February 28.
“This type of analysis is becoming increasingly vital, particularly as Wall Street investors—who monitor these macro factors daily—are now actively involved in Bitcoin trading.”
US Dollar Gains Strength as Traders Seek Safe Havens
In the midst of this week’s financial upheaval, the US dollar has emerged as a strong performer, showing consistent strength.
“A strengthened US dollar leads to a decline in this liquidity measure, suggesting a downward pressure on Bitcoin valuations. The peak in global liquidity expected in late December 2024—driven by a surging US dollar—provides a rationale for Bitcoin’s current correction,” Matrixport remarked in their report.
The US dollar index (DXY) has seen a surge for the third consecutive day, approaching 107.40, as traders turned to the dollar for safety amid market declines. This increase followed Donald Trump’s announcement of tariff hikes, which would impose a 25% tariff on imports from Canada and Mexico and an additional 10% on Chinese goods, starting March 4.
Movements in traditional markets have grown increasingly significant for cryptocurrency traders, partly due to the popularity of Bitcoin ETFs in the U.S., which have attracted $39 billion in inflows since their launch in January 2024.
However, 56% of these inflows are likely linked to arbitrage strategies, while the remaining purchases of Bitcoin ETFs have been for long-term holdings, as noted by 10x Research’s Markus Thielen.
Bitcoin Bulls Remain Active
Certain Bitcoin traders are embracing the “buy the dip” strategy, which involves accumulating Bitcoin during price corrections, much like acquiring an item at a discount.
A social sentiment tracker by Santiment indicated that mentions of “buying the dip” have surged to their highest level since July 2024.
Charles Edwards, founder of the digital asset fund Capriole Investment, told Cointelegraph in a previous interview that the current high levels of fear and liquidations might suggest the market is nearing a short-term bottom.
Meanwhile, CryptoQuant CEO Ki Young Ju expressed that the bull cycle is not finished but acknowledged he would be mistaken if Bitcoin were to drop below $75,000.
