On March 10, Bitcoin (BTC) found itself once again confronting multi-month lows, in line with the commencement of trading on Wall Street.
The BTC price appeared to be on the verge of marking new four-month lows. According to data from Cointelegraph Markets Pro and TradingView, BTC/USD experienced a drop of approximately 4% in a single day, resulting in a price of $79,170 on Bitstamp.
As the week drew to a close, there was a noticeable weakness in risk assets, leading to a shift towards safer options. The stock market also took a significant hit with the S&P 500 and Nasdaq Composite Index experiencing drops of 2% and 3.5% respectively.
In a related development, The Kobeissi Letter, a trading resource, highlighted the role of US government spending reductions led by the Department of Government Efficiency (DOGE) in this downturn. The letter stressed the importance of not overlooking the impact of these spending cuts.
It is to be noted that the crypto markets have eliminated $1 trillion in market cap within a span of two months. “The rally after the U.S. Strategic Reserve was announced has been entirely wiped out,” The Kobeissi Letter mentioned in relation to BTC/USD.
Rekt Capital, a well-known trader and analyst, suggested that followers should keep a close eye on the rising relative strength index (RSI) values against lower prices for signs of a reversal.
Meanwhile, trading firm QCP Capital pointed to last month’s hack of the crypto exchange Bybit as the reason for the broader crypto market downside. The firm suggested that the price drop may be worsened by holders trying to get ahead of the hacker-driven supply, given that the hackers have indicated a willingness to cash out rather than risk further losses.
As the market anticipates more optimistic expectations from Q3 onwards, QCP Capital concluded that unless crypto finds a new narrative, there is likely to be an increased correlation between BTC and equities in the near term.
Please note, this article does not offer investment advice or recommendations. All investments and trading moves carry risk, and readers should perform their own research before making a decision.
