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Bitcoin’s recent price drop has sparked concern among investors, and according to Matrixport, this correction could continue until April. The firm points to macroeconomic factors like a strengthening US dollar and shifting central bank policies as key drivers of Bitcoin’s struggle.
Bitcoin Dips Below $80K Amid Market Sell-Off
Bitcoin’s recent decline follows a broader financial market shift, with the US dollar strengthening due to tighter liquidity conditions. The US Dollar Index (DXY) has been rising, making risk assets like Bitcoin more vulnerable. Matrixport analysts suggest that this correction could be part of a natural 13-week cycle observed in past Bitcoin price movements
Additionally, the Federal Reserve’s monetary policy remains a key factor, with a more hawkish stance anticipated due to rising inflation expectations. Market analysts also note the increasing correlation between Bitcoin and traditional financial markets, making it susceptible to macroeconomic shifts
Hence, there is a strong chance that mid-April will mark the lowest point of the year for Bitcoin. This goes against the prevailing expectation that the market will pump and change its current course. Even if such a pump occurs, it will likely be short-lived, creating a false sense of strength. While most people anticipate a rally in mid-April, it may turn out to be a trap. Only from that point will the market begin a healthy recovery, following the “natural” cycle toward the expected highs in Q3.
Bulls Still Betting on a Rebound
Despite these bearish signals, some traders remain positive. The rise of Bitcoin ETFs, which have brought in $39 billion since their launch in early 2024, continues to shape market sentiment. However, Markus Thielen from 10x Research suggests that over half of these inflows are likely tied to arbitrage strategies rather than long-term investments.
Even after shedding all election gains, BTC is back to square one. Still, some traders believe that “buying the dip” is a golden opportunity at this stage. Santiment data shows that mentions of “buy the dip” have surged to their highest level since July 2024. Charles Edwards, founder of Capriole Investment, believes the market may be nearing a short-term bottom, while CryptoQuant CEO Ki Young Ju maintains that the bull cycle isn’t over—though he warns that a drop below $75,000 could change that outlook.
For now, Bitcoin remains under pressure, but with strong bullish sentiment still in play, traders are watching closely to see if the correction extends or if a rebound is on the horizon.