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Julien Bittel, the Head of Macro Research at Global Market Investor, has shared an intriguing perspective on the Bitcoin market following a significant price drop this past week. In a daring assertion, the financial analyst has expressed confidence in the leading cryptocurrency’s potential for a rebound, attributing the recent price decline to broader macroeconomic factors.
Could Bitcoin’s Drop Below $80,000 Signal The End Of The Downtrend?
Last week, the BTC market experienced substantial bearish price movement, with prices declining from over $96,000 to under $80,000. In a post on February 28, Bittel linked this decline to the tightening of financial conditions in Q4 2024, which has restricted liquidity in the market, complicating the ability of speculative assets like Bitcoin to sustain upward trends.
When liquidity in the market contracts, economic surprises diminish, raising concerns about a possible recession and ultimately fostering market uncertainty and risk-aversion. However, Bittel anticipates a shift in investor sentiment by March, suggesting a possible recovery for Bitcoin.
Source: @BittelJulien on X
Bittel observes that market conditions have been rapidly improving over the last two weeks, as evidenced by a weakening dollar, decreasing bond yields, and declining oil prices. These macroeconomic trends indicate that liquidity is returning to the financial system, potentially signaling a revival in market optimism.
Importantly, Bittel suggests that Bitcoin’s recent dip below $80,000 has fully accounted for the impacts of tightened liquidity conditions. While a further price drop cannot be ruled out, sentiment indicators suggest limited scope for additional decline. For instance, Bitcoin’s Relative Strength Index (RSI) has recently plummeted to 23, marking its most oversold condition since August 2023. Such market dynamics support the expectation of an impending price recovery.
The BTC Market: A Contrarian Opportunity?
In concluding his analysis, Bittel cautions investors against becoming overly bearish, instead advocating for a more optimistic mindset amidst prevalent market fears.
Additionally, blockchain analytics company Santiment points out that the “market crowd” often misjudges price movements—historically, when traders predict Bitcoin will decline, it tends to rise, and vice versa. Consequently, the current Bitcoin market could represent a distinctive opportunity for accumulation, despite overarching expectations of a prolonged price decrease.
Source: @santimentfeed on X
As of this writing, Bitcoin is trading at $84,750, having gained some value on Friday following a positive US inflation report. With a market capitalization of $1.68 trillion, the leading cryptocurrency maintains its position as the largest digital asset, boasting an impressive market dominance of 60%.
Featured image from The Independent, chart from Tradingview
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