The world’s largest cryptocurrencycontinued to pull back this weekend and is now down about 26% from its all-time high set on January 20.
In February, bitcoin (BTC-USD) lost 17.5% of its value – the largest one-month loss since June 2022.
Investors are now torn over what’s next for bitcoin as it sits near $80,000. From a technical perspective, I see huge support in the low $70,000’s. And based on the current action, there’s a good chance that level is tested before a new rally begins.
The technicals on the chart above have played a role in the recent downturn, along with several other factors…
No. 1: Regulatory Uncertainty
On March 3, President Donald Trump announced plans to establish a national strategic reserve of cryptocurrencies – including bitcoin, Ethereum (ETH-USD), XRP (XRP-USD), Solana (SOL-USD), and Cardano (ADA-USD).
The announcement initially boosted market optimism. But the lack of detailed information and concerns about the feasibility and implications of this kind of reserve led to increased market caution.
Last Friday, the White House hosted the first annual crypto summit. The event didn’t offer any new insights into the big picture of how bitcoin fits into the U.S. long-term plan. The summit left investors feeling disappointed.
No. 2: Profit-Taking by Investors
Following bitcoin’s surge to its all-time high in January, many investors opted to take profits… which contributed to selling pressures and a subsequent price decline.
No. 3: Broader Economic Sentiments
Global economic factors – including inflation concerns, tariffs, a global slowdown, and more potential wars – have investors moving into “less risky” assets, which has lowered demand for bitcoin.
Over the weekend, Trump made comments on Fox News about possible short-term setbacks in the U.S. economy. The president said “there could be a little disruption” due to new tariffs and cost-cutting measures.
The bold moves to cut wasteful government spending and tariff threats has undoubtably hurt investor confidence. And as investors become more fearful, that means more money comes out of the risk-on assets such as bitcoin and cryptos.
Despite the recent pullback, many experts remain optimistic about bitcoin’s long-term prospects. I’m still in the bullish bitcoin camp for the longer term. And I believe a new all-time high is inevitable in 2025.
Some investors might be wary about the recent pullback. But based on what I’m seeing, this could make for an attractive buying opportunity.
I’ll continue to watch this space closely… So stay tuned for more.
Here’s to the future,
Matt McCallEditor, Market Insights
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