Bitcoin's March Correction: Awaiting April Rally

Bitcoin's recent correction could extend into April, according to a research report by Matrixport. The cryptocurrency fell below $80,000 on February 27, marking the first time it had done so in a week. This decline was part of a broader market sell-off, driven by escalating global trade tensions. The Nasdaq 100 dropped by 7.05% over the past five days, while the S&P 500 and the Dow Jones Industrial Average fell by 1.33% each.

Matrixport's analysis suggests that the current Bitcoin correction could last until March or April before attempting to rally toward previous highs. The research firm attributes its ability to forecast Bitcoin's price trajectory to its analysis of macroeconomic trends and central bank policies. This type of analysis is becoming increasingly crucial, especially as Wall Street investors, who track these macro factors daily, are now actively participating in Bitcoin trading.

The US dollar has been strengthening in the face of financial turmoil, with the DXY dollar index surging for a third straight day, nearing 107.40. Traders are seeking refuge in the greenback amid a market sell-off, which is putting downward pressure on Bitcoin prices. Global liquidity peaked in late December 2024, driven by a surging US dollar, which provides a clear explanation for Bitcoin's ongoing correction.

Bitcoin bulls are still on the lookout for opportunities to "buy the dip," which refers to accumulating Bitcoin when prices correct. Mentions of "buying the dip" have surged to their highest level since July 2024, according to Santiment's social sentiment tracker. Some traders believe that the significant fear level and liquidations may indicate that the market is near a short-term bottom. However, others caution that the bull cycle is not over, but they would be wrong if Bitcoin drops further below $75,000.