Bitcoin (BTC) has seen a decline of over 29% from its record high of $109,000 in January, mirroring the general market correction impacting both cryptocurrencies and U.S. stocks. With investors gripped by fear and uncertainty, many are questioning whether this marks the onset of a bear market or if it’s merely a typical correction preceding another upward movement.
The recent decline has been influenced by macroeconomic instability, fears of a global trade war, and tightening financial conditions, all of which have eroded investor confidence. As BTC struggles to break through significant levels, selling pressure has intensified, fostering a risk-averse atmosphere in the market.
Nevertheless, some investors maintain a sense of optimism, believing this correction is a temporary phase and that Bitcoin will recover as market conditions improve. CryptoQuant CEO Ki Young Ju recently shared observations on X, emphasizing the Bitcoin Apparent Demand indicator, which currently suggests low demand. Historically, periods of reduced demand have led to either prolonged consolidation or further declines, underscoring the critical nature of the coming weeks for BTC’s short-term direction.
With Bitcoin having a hard time regaining its momentum, the market remains tense, anticipating either a revival or a deeper correction. The next few weeks will be pivotal in determining BTC’s next major movement.
Bitcoin Encounters Uncertainty Amid Global Market Recovery Struggles
Bitcoin and the global markets are grappling with instability, dominated by fear and speculation among investors. As fears of a global trade war heighten and macroeconomic conditions remain unstable, both the cryptocurrency and U.S. stock markets have witnessed significant corrections, leaving traders cautious of further declines.
Presently, Bitcoin is trading at its lowest levels since November 10, 2024, as bears continue to hold sway while bulls attempt to establish a foundation for recovery. Since late January, BTC has been entrenched in a downward trend, with investors consistently setting lower targets based on the belief that the bull cycle may have concluded. Despite Bitcoin’s weak price action, not all analysts are convinced this signifies the beginning of an extended bear market.
Ju’s insights on X indicate that Bitcoin demand currently appears stagnant. His analysis points to the Bitcoin Apparent Demand indicator, suggesting that interest in BTC has not yet increased, but it’s premature to declare this a bear market. Historically, Bitcoin has navigated similar phases of subdued demand before experiencing strong recoveries, making the upcoming weeks critical for BTC’s path forward.
At this point, Bitcoin must recapture essential levels to restore market confidence. Should demand remain weak, BTC could face further declines; however, if buyers enter the market, it could begin positioning itself for a potential recovery.
Bulls Strive to Reclaim Crucial Levels
Bitcoin is currently trading at $83,100, following several days of selling pressure that has kept it below the $85K threshold. The market continues to be under bearish influence, and bulls have yet to demonstrate robust momentum for recovery.
For BTC to regain its bullish momentum, it needs to reclaim the $90K–$91K range, as this area corresponds with the 4-hour 200-moving average (MA) and exponential moving average (EMA). Successfully breaking and holding above this zone would indicate renewed buying power, potentially paving the way for a significant rebound.
On the other hand, if BTC is unable to reclaim the 200-day MA and EMA in the upcoming days, selling pressure might spike, causing a drop below $80K. Falling below this critical psychological level could initiate further liquidations, driving BTC into lower demand zones and extending its downward trend.
Given that market sentiment remains delicate, the forthcoming trading sessions will be vital in determining whether Bitcoin can bounce back or if another round of sell-offs will push it lower. Bulls need to act swiftly, or BTC may face additional downside risks in the near term.
Featured image from Dall-E, chart from TradingView
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