Bitcoin (BTC) has undergone one of its most significant price corrections lately, dropping from $96,131 on February 24 to an anticipated local low of $85,418 today. This decline has led to liquidations surpassing $1.5 billion, predominantly from long positions.
Is It Time To Buy Bitcoin?
The recent market movements indicate that the cryptocurrency sector is responding to unfavorable macroeconomic conditions, influenced by US President Donald Trump’s proposed trade tariffs and a hawkish tone from the US Federal Reserve (Fed).
The total cryptocurrency market capitalization has slipped below $3 trillion for the first time since November 2024, indicating a growing bearish outlook surrounding risk-on assets. Significant altcoins, such as Ethereum (ETH), have experienced declines exceeding 10% over the past week.
Nonetheless, despite yesterday’s dip, the overall sentiment regarding the crypto market seems to be improving. In a recent post on X, Andre Dragosch, who leads European Research at Bitwise, indicated that the worst may be behind us for BTC.
Dragosch shared the following Cryptoasset Sentiment Index, which is signaling a strong contrarian buy stance for the leading cryptocurrency. The analyst noted:
Widespread negativity among flows, on-chain insights, and derivatives data suggests that further downside risks are relatively contained. The risk-reward dynamic appears quite appealing at current prices.
To emphasize the level of negativity surrounding risk-on assets, Dragosch pointed out that US spot Bitcoin exchange-traded funds (ETFs) saw their largest daily net outflow on record yesterday. Data from SoSoValue corroborates this observation.
Furthermore, the Crypto Fear & Greed Index remains firmly in bearish territory. Dragosch noted that sentiment levels are “as bearish as during the macro capitulation last August.” At that time, BTC hit a local bottom at $49,000 before rallying to several new all-time highs (ATHs).
On a brighter note, on-chain metrics suggest that crypto whales are taking advantage of market uncertainty. According to crypto analyst Ali Martinez, long-term holders have acquired nearly 20,400 BTC in response to the recent sell-off.
Strategy Falls With BTC Crash
Aligned with BTC’s decrease, the Strategy stock MSTR has also suffered, plummeting 55% from its peak of $543 in November 2024. As of writing, MSTR is trading at $249, reflecting a decline of about 29% over the past month.
Despite the prevailing bearish sentiment, recent comparisons of BTC’s returns against other assets, such as gold and stocks, highlight that while Bitcoin’s yearly growth rate has slowed in recent years, it continues to significantly outperform traditional asset classes.
Nevertheless, not all analysts share Dragosch’s positive outlook. In stark contrast, Standard Chartered recently cautioned that BTC might encounter additional downside before it can resume its upward trajectory. At the time of writing, BTC is trading at $87,086, down 1% over the past 24 hours.
