 ▲ Bitcoin (BTC), virtual assets, cryptocurrency, market fear, cryptocurrency decline / ChatGPT-generated image |
As Bitcoin (BTC) enters the second week of March, it is encountering formidable obstacles in the form of geopolitical crises and macroeconomic uncertainty. With military conflict in the Middle East entering its second week and international oil prices surging, investor sentiment toward risk assets like Bitcoin is rapidly deteriorating.
Bitcoin is precariously hovering around the $66,000 support level. According to analysis, the amount of Bitcoin flowing into exchanges has increased in recent days, adding short-term selling pressure. In particular, as tensions between Iran and the United States escalate, investors are showing a stronger tendency to secure cash, which is expected to further heighten Bitcoin’s price volatility.
Data from on-chain analytics firm Santiment clearly reflects market anxiety. Bitcoin’s Relative Strength Index (RSI) has fallen to around 40, maintaining a bearish trend, while the Market Value to Realized Value (MVRV) metric is also declining, suggesting worsening investor profitability. Santiment noted that market sentiment has entered an extreme fear phase, signaling the risk of additional price declines.
Macroeconomic factors are also unfavorable for Bitcoin. As international oil prices surpassed $100 per barrel and inflation concerns resurfaced, expectations for an interest rate cut by the U.S. Federal Reserve have significantly weakened. Markets see little chance of a rate cut within the first quarter, and such tight financial conditions hinder capital inflows into high-risk assets like Bitcoin. This backdrop also explains why some Wall Street experts are mentioning the possibility of a 35% market downturn.
Institutional investors are becoming more cautious as well. Inflows through spot Bitcoin ETFs have dropped by more than 30% compared to the previous week, and some large holders have begun trimming their positions to manage risk. If Bitcoin falls below $64,000, large-scale liquidations could be triggered, potentially deepening the downturn. The fact that 43% of the current Bitcoin supply is held at a loss is a significant factor increasing downward pressure on the market.
The direction of the virtual asset market this week is likely to be determined by key U.S. economic data releases and developments in the Middle East. The key question is whether Bitcoin can overcome geopolitical risks and prove its value as digital gold, or whether it will decline alongside equities and enter a prolonged correction phase. Investors should closely monitor changes in technical indicators and establish prudent strategies to prepare for heightened volatility.
Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on this information. The content should be interpreted for informational purposes only.