Bitcoin has faced significant downward pressure over the past few weeks, with its price falling from $105,000 on February 1 to its current level of $87,037. This decline has sparked considerable uncertainty in the market, with many traders uncertain whether this marks Bitcoin’s bottom.
A large number of investors are selling their Bitcoin at a loss, with short-term holders offloading 43,600 BTC, worth approximately $3.9 billion, the highest amount since August of last year, according to Glassnode. These sales have resulted in $1.8 billion in total losses, marking the largest one-day loss in months. Despite this, some market experts believe that Bitcoin may be nearing its lowest point before a potential rebound.
Andre Dragosch, Head of Research at Bitwise Europe, pointed to the Crypto Asset Sentiment Index, which is currently at its lowest since August 2024. “The Crypto Asset Sentiment Index just flashed a massive contrarian buy signal for Bitcoin,” Dragosch said. “The widespread bearish sentiment across flows, on-chain data, and derivatives suggests that the downside risks are fairly limited.”
At present, the total value of the cryptocurrency market has dropped to $2.9 trillion, a $1 trillion decrease from its December 2024 peak, according to CoinMarketCap. Several factors have contributed to this downturn, including a $1.4 billion hack on Dubai-based exchange Bybit, which raised concerns about market security and prompted traders to withdraw funds. Additionally, fears surrounding Donald Trump’s proposed tariffs on Canada and Mexico, along with concerns about Federal Reserve policies, have added further uncertainty to the market.
Despite the negative sentiment, some experts remain optimistic about Bitcoin’s future. Investment firm Bernstein believes Bitcoin could reach $200,000 within the next year. “We view the current correction as another opportunity to participate in this cycle,” analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote in a report. While they acknowledge that Bitcoin’s rise may be delayed, they expect strong long-term growth.
Geoffrey Kendrick of Standard Chartered suggests that Bitcoin could dip into the low $80,000s before rebounding. He also emphasized that Bitcoin ETFs will need to see $1 billion in outflows before confirming a true market bottom. Meanwhile, traders remain hopeful, with data from basedmoney.io showing many still betting on Bitcoin reaching $120,000 by March 28.
Bitcoin has a history of recovering from significant drops, and while the market remains volatile, some traders believe the worst is behind them. Others, however, are awaiting more stability before committing to further investments.
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