Bitcoin's Plunge: Crypto Analyst Warns of High Risk Amidst Market Uncertainty

Coin WorldSaturday, Mar 1, 2025 1:36 pm ET

1min read

Bitcoin's Risk Factor Remains High, Crypto Analyst Notes

Bitcoin, the world's first cryptocurrency, continues to be a high-risk asset, closely tied to shifts in the macroeconomic landscape, according to a crypto analyst. Emily Nicolle, a crypto reporter for Bloomberg, shared her insights as Bitcoin plunged 13% and entered bear territory, potentially due to macroeconomic uncertainty and political factors.

Nicolle described Bitcoin as a "very risk-on asset," highly correlated with changes on Wall Street. She explained that investors cannot discount the impact of the macroenvironment on Bitcoin, stating, "Everything that’s happening to stocks that knocks on crypto too." Nicolle added that Bitcoin's recent turmoil is linked to the S&P 500's performance.

The analyst noted that the cryptocurrency sector has faced challenges, including a $1.5 billion hack last week and political turmoil. Nicolle emphasized that Bitcoin's future performance remains uncertain, and traders are closely watching the $70,000 mark, a crucial psychological and technical support zone.

Nicolle also pointed out that political uncertainty, such as the lack of clear cryptocurrency regulations promised by former U.S. President Donald Trump, is another factor driving Bitcoin into bearish territory. She predicted that Bitcoin's potential is heavily influenced by the macroenvironment, and without positive developments, it may continue to decline.

Bitcoin's status as the "tide that lifts all boats" means that when it rises, other cryptocurrencies also tend to increase. However, smaller cryptocurrencies are more vulnerable to market tumult and exhibit higher volatility compared to Bitcoin.

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