Bitcoin in the market’s pincers, fear, tariffs and volatility shake the price
Summary of Market Developments
In the past week, emotions played a crucial role in the financial markets, particularly fear and concerns about a potential recession. A significant factor influencing the market was the ongoing trade policy of the United States, which contributed to substantial price fluctuations. These market turbulences provided analysts with valuable data that can be used to predict future market trends.
Market Summary
At the beginning of the week, the Chicago CME exchange filled Friday’s closing price. The market remained relatively stable despite an announcement by Michael Saylor that his company, Strategy (formerly MicroStrategy), had purchased over 20,000 bitcoins for nearly $2 billion. Although the news did not immediately translate into positive price movements, Bitcoin later reacted to broader market factors.
On Monday, U.S. stock markets experienced a decline, with the technology sector being the most affected. Given the increasing correlation between Bitcoin and tech stocks, the cryptocurrency market also came under pressure. A key moment was Donald Trump’s announcement of a 25% tariff on imports from the European Union, which caused Bitcoin to drop to $82,000.
By Wednesday, however, Nvidia’s earnings report sparked euphoria, pushing Bitcoin back up to $87,000. The optimism was short-lived, as the confirmation that postponed tariffs on Canada, Mexico, and China would take effect once again pressured the market. Along with the release of U.S. GDP data, Bitcoin fell again to around $84,000. Another major factor was the Friday expiration of Bitcoin options worth nearly $5 billion, which drove the price down to a weekly low of $78,305. After the options expired, the market stabilized and began a slight recovery.
Technical Analysis
Short-term Signals
On the four-hour chart, a symmetrical triangle formation emerged, with its breakout confirming a bearish scenario. Despite this, signals of a potential reversal are appearing, especially a bullish divergence on the RSI indicator. This suggests a possible trend shift and a return to an uptrend.
Long-term Outlook
The daily chart confirmed the completion of a double-top formation with a target level of $79,000. The RSI at this level indicates an oversold market, suggesting potential for a rebound. The weekly chart outlined key support and resistance levels, with a bullish signal appearing in the form of a hammer candlestick. The Fibonacci retracement highlights critical price levels, with bulls attempting to reclaim the 50% retracement level around $90,000.
Market Sentiment
Over the past week, market uncertainty was high, as reflected in the Fear and Greed Index. On Thursday, the index dropped to 10, indicating extreme fear, but by the end of the week, it recovered to 26 points. Analysts are observing an increasing interest in long positions on exchanges, which could signal the formation of a local bottom.
Expected Market Development
March remains uncertain. Historical data suggests that a red February is often followed by further declines in March. However, traders’ realized losses have reached levels that have previously preceded market rebounds. Given macroeconomic factors, particularly developments in the U.S., Bitcoin remains influenced by global economic conditions. Key upcoming macroeconomic data will be crucial in determining the market’s future direction.
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