On March 6, U.S. President Donald Trump signed an executive order to establish crypto funds in the United States, a move that was expected to boost the market. However, Bitcoin and many other digital assets have instead declined in value. Why?
Five Key Factors Behind Bitcoin’s Bearish Trend
Several factors have contributed to the downward pressure on Bitcoin and the broader crypto market:
- Economic Uncertainty Due to Trump’s Trade Wars 🏛️
- Ongoing U.S. trade conflicts have increased market instability, discouraging risk-on investments like crypto.
- Investor Disappointment Over the Crypto Fund 💰
- Many traders expected Trump to immediately start purchasing digital assets with federal funds, leading to frustration when this did not happen.
- Capital Outflow from Crypto Derivatives 📉
- Between March 3 and March 7, capital withdrawals from crypto derivatives reached $876 million, further weakening market momentum.
- Bybit Exchange Hack 🔓
- A major security breach on Bybit resulted in the theft of $1.46 billion worth of Ethereum, shaking investor confidence.
- Stock Market Crash in the U.S. 📊
- The broader financial market downturn has impacted crypto as well, with Tesla (NASDAQ: TSLA) shares dropping 40% in the past month.
What’s Next for Bitcoin?
Looking at historical patterns, Bitcoin is currently trading well below its 200-day moving average, similar to the second half of 2024. If this trend holds, BTC is likely to fluctuate between $78,000 and $90,000 until mid-April.
- Bullish Scenario: If crypto demand increases in April, BTC could return to $100,000.
- Bearish Scenario: If selling pressure persists, Bitcoin could decline further, possibly reaching $70,000.
As uncertainty looms, traders should stay cautious and monitor market developments closely.