Bitcoin faced a sharp correction after reaching its historic peak in early 2024. Rising to $109,114 after President Donald Trump took office in January, BTC plummeted to $76,600 on March 11, the lowest level in four months. As of March 13, it is trading around $82,600, witnessing a 24% decline. Amid uncertainties in the market, analysts are evaluating Bitcoin’s future direction.

MACROECONOMIC UNCERTAINTIES AND THEIR IMPACT ON BITCOIN The decline in Bitcoin is not just a crypto market specific situation. The global economy is following a volatile course due to trade wars and interest rate policies. Escalating recession fears in the US, Trump’s tariff policies, and global trade tensions are negatively affecting risk perception. Trade tensions with Canada and the European Union are creating a panic atmosphere in the markets. The US imposing a 25% tariff on steel and aluminum imported from Canada led Canada to respond with the same level of tax on $21 billion worth of US goods. The European Union also announced tariffs of $28 billion in retaliation, escalating trade wars to a higher level. These developments steer investors towards risk aversion, making safe-haven assets like cash, gold, and bonds more attractive. Volatile investments like Bitcoin, however, faced short-term selling pressure. In the US, the inflation data released on March 12 provided temporary relief. The consumer price index for February rose only by 0.2%, bringing the annual inflation down to 2.8%. Core inflation also dropped to 3.1%, the lowest level since April 2021. Bitcoin briefly rose above $84,000 with this data but retraced its gains as the day progressed.

INSTITUTIONAL INVESTORS EXITING BTC A significant determinant in the Bitcoin market is the stance of institutional investors. Significant outflows have been observed from spot Bitcoin ETFs since February 13. The worst blow came on February 25, where over $1 billion was withdrawn, clearly indicating a risk-averse tendency among institutional investors. As of March 12, BlackRock’s IBIT fund still holds the largest ETF in the market with 568,000 BTC. Fidelity’s FBTC fund possesses 197,500 BTC, while Grayscale’s GBTC fund holds 196,000 BTC. Another factor giving a political dimension to Bitcoin discourse is that at least six officials in the Trump administration directly or through ETFs own BTC. Health and Human Services Secretary Robert F. Kennedy Jr. holds a Bitcoin investment ranging from 1 to 5 million dollars, while Treasury Secretary Scott Bessent invested between $250,001 and $500,000 in BlackRock’s Bitcoin ETF. Bessent’s announcement to liquidate this position within 90 days draws attention to the link between the administration and the crypto markets. WHAT DO THE TECHNICAL DATA SAY? The open interest (OI) level in the Bitcoin futures market also provides important signals about investor behavior. Having surpassed $70 billion on January 22 when BTC hit its all-time high, the open interest decreased as Bitcoin fell, reaching $45.7 billion on March 11. However, in the last two days, the open interest rebounded and exceeded $1 billion as of March 13. This indicates that some investors, albeit cautiously, are re-entering long positions. Technical analyst CryptoCon points out that Bitcoin has historically reached its lowest levels in the Bollinger Bands of the Relative Strength Index (RSI). These points have usually formed a bottom for BTC in the past, followed by a recovery. CryptoCon notes that in 2013, 2016, and 2020, similar cycles occurred, and Bitcoin reached new highs within 9-12 months after a correction. According to them, Bitcoin’s current situation resembles that of March 2017, and new highs may be possible in the long term. However, this optimistic view is not shared by all analysts. Analysts like Doctor Profit focus on two different scenarios for Bitcoin’s direction: Bottom at $68,000 – $74,000: The Market Value to Realized Value (MVRV) indicator shows that BTC has created a strong bottom at these levels. Despite ongoing macroeconomic uncertainties, a new rally may start if BTC holds at these levels. Black Swan Scenario: Escalating trade wars by Trump, global recession concerns, and a possible financial crisis could push Bitcoin much lower. If a major economic shock occurs, the possibility that BTC could drop to $50,000 is on the table. THE FUTURE PATH FOR BITCOIN The market is waiting to see whether Bitcoin will follow historical cycles or if macroeconomic pressures will prevail. Investors should closely monitor trade wars and global economic dynamics alongside long-term technical indicators. For Bitcoin to recover, ETF entries need to return to positive territory and open interest levels must steadily rise. Uncertainties prevail in the market currently, and investors are recommended to avoid taking excessive risks. While technical indicators may be optimistic, it should not be forgotten that the market is sensitive to external shocks.